Bill Introduced to Stop Decision to Allow Expansion of Norwegian Air Service in the United States

T he increasingly vociferous controversy over Norwegian Air International expanding service to the United States has significantly intensified with two new developments — one of them in which the duration of the open comment period has been extended by ten days. More on that in a moment.

Bill Introduced to Stop Decision to Allow Expansion of Norwegian Air Service in the United States

In response to the show cause order concerning Norwegian Air International — which is the subsidiary of Norwegian Air Shuttle based in Ireland — issued by the Department of Transportation of the United States granting tentative approval to the ultra-low-cost carrier to add more flights to the United States, four members of the House of Representatives of the United States introduced a strongly-worded bipartisan bill to block that decision.

Please allow me to post the contents of this press release from Thursday, April 28, 2016 pertaining to that bipartisan bill in its entirety:

Washington, D.C. – Today, Representatives Peter DeFazio (D-OR), Frank LoBiondo (R-NJ), Rick Larsen (D-WA), and Lynn Westmoreland (R-GA), introduced H.R. 5090, legislation that would prevent the U.S. Department of Transportation (DOT) from permitting a foreign air carrier to operate between European countries and the United States unless the carrier complies with basic, fair U.S. or European Union labor standards. The legislation was introduced in response to the DOT’s tentative decision to grant a permit to Norwegian Air International (NAI). NAI established itself in Ireland, where labor laws permit the airline to hire its pilots and flight attendants on individual employment contracts under non-European law in order to cut costs. NAI’s overt practice of labor forum-shopping violates our Open Skies agreement with Norway and the European Union and gives it an unfair competitive advantage in the transatlantic market.

“Consumers may purchase tickets on Norwegian.com and they may board planes marked Norwegian in big bold letters, but this airline is ‘Norwegian’ in name only. The DOT record shows that Norwegian Air International is headquartered in Ireland and employs contract crews based in Thailand to circumvent Norway’s fair and strong labor standards. It’s a virtual airline set up to undercut competition by exploiting cheap labor. Our bipartisan legislation sends a strong message to DOT—we must stop this race to the bottom, and protect the open and fair transatlantic aviation market,” said DeFazio.

“Norwegian Airlines has sidestepped the bedrock labor agreements that are the foundation of the US-EU Air Transport Agreement. In so doing, they have compromised the competitiveness of American air carriers. There has been long-standing opposition in Congress to permitting this to go forward. The U.S. Department of Transportation must reconsider its position,” said LoBiondo.

“My colleagues and I have been clear with DOT that strong labor standards must factor into NAI’s air carrier permit decision. Today we are introducing legislation that would prohibit DOT from issuing a permit to NAI if doing so would undermine labor standards,” Larsen said. “Granting an air carrier permit to NAI would say to the world that the U.S. rewards other countries that break their commitments to protecting workers. Our agreements with other countries are only as strong as our ability and willingness to enforce them, which is why I am pushing hard for the U.S. to hold other countries accountable for their end of the deal,” said Larsen.

Article 17 bis of the U.S.-EU-Iceland-Norway Open Skies Agreement states that “[t]he opportunities created by the Agreement are not intended to undermine labour standards or the labour-related rights and principles contained in the Parties’ respective laws” and further requires that these “principles . . . shall guide the Parties as they implement the Agreement.” With the decision to grant temporary approval, DOT has decided provisions in the U.S.–EU Agreement that address labor are not, on their own, a sufficient basis for rejecting an otherwise-qualified applicant.

The bipartisan legislation introduced today would require the DOT to find that a permit is consistent with article 17 bis before issuing a permit, maintaining the competitive balance in the transatlantic aviation marketplace.

In 2013, NAI applied for a foreign air carrier permit to permanently operate in the United States. DOT granted tentative approval on April 15, 2016. Behind the NAI application is a global outsourcing business model that will put U.S. airlines and their employees at a competitive disadvantage. U.S. and other European carriers rightly adhere to the high labor standards created through decades of hard work and commitment to a sustainable and socially-responsible aviation system. The point of Open Skies is to create an environment that fosters competition, not flags of convenience.

Yesterday, DeFazio, LoBiondo, and Larsen sent a letter urging the Department, in the strongest possible terms, to set aside the flawed tentative decision on Norwegian’s permit application and to deny the application.

Your Chance to Be Heard is More Important Than Ever

This is your opportunity for your voice to be heard and your opinions to be considered, as the announcement from the Department of Transportation on Friday April 15, 2016 has been open for public comment by interested parties originally through Friday, May 6, 2016; but the date has now been extended through Monday, May 16, 2016. Submissions by you and other interested parties will be read and considered before a final order is issued in this matter.

Summary

The opinions I expressed in the Summary section of this article I wrote have not changed; so I will not repeat them here.

Perhaps I did not read the aforementioned press release well enough; but I missed the part where legislation to block the decision issued from the Department of Transportation would be helpful to — or benefit — airline passengers.

I do not believe that the concern pertaining to Norwegian Air International is credible — at least, from a competitive point of view. If so, the likes of Spirit Airlines and Allegiant Air would have “eaten the lunch” of the legacy airlines based in the United States long ago — and that has not happened. In fact, they seem to coexist rather well.

If lawmakers were really concerned about cheap labor practices which curtail competition, there would be far fewer products in the United States from countries which encourage operations with sweatshop conditions. I just do not buy their argument…

…and as for the airline operating in “name only” — well, that is somewhat similar to an argument about which some consumers have been complaining concerning the practice of code-sharing between airlines.

While safety is the ultimate priority for airline passengers, freedom of choice should be a priority as well. If consumers do not want to patronize an airline such as Norwegian Air International, they will vote with their wallets and pocketbooks.

We have already seen what happened when freedom of choice is limited by the federal government with regard to the significant consolidation of the airline industry within the United States, as carriers seem to act in true oligopolistic fashion. They are reporting record revenues and earning record profits. Good for them. While I am certainly not the target market, ancillary fees at least offer a choice to the consumer. Attempts to implement protectionist policies by preventing competition can only hurt the consumer at the behest of the benefit of those large corporate entities known as airlines who demand that politicians heed their concerns…

…but you and I did not vote for those politicians to artificially limit our choices — with airlines or any other company or industry, for that matter.

I have challenged government intervention in the free market in the past when it is purely for reasons of economics — regardless of whether or not the consumer benefits. For example, I expressed my opposition to Charles Schumer — a member of the Senate of the United States representing New York who has been frequently critical of airline fees — when he called for a federal investigation by the Department of Justice and the Department of Transportation pertaining to airlines enjoying record profits amidst dramatically declining prices for fuel, as he believes that those profits should be passed on to consumers through lower airfares in the United States.

The government should only intervene to protect the consumer when a company purposely engages in attempting to unfairly deceive the consumer — such as resort fees and mandatory facilities fees which have run rampant in some sectors of the lodging industry. I have no problem with a resort fee being built into the room rate: take that $35.00 resort fee and simply raise the room rate by $35.00. I only have a problem with the deceptive practice, which should require government intervention.

To reiterate, I am for Norwegian Air International to serve more airports in the United States to give more options to consumers — as well as to dilute the oligopoly and perceived collusion which seems to define the commercial aviation industry currently in the United States.

In the meantime, please take a few moments to not only post your thoughts in the Comments section below; but also submit them to the Department of Transportation of the United States by Monday, May 16, 2016.

Source: Norwegian Air Shuttle.

4 thoughts on “Bill Introduced to Stop Decision to Allow Expansion of Norwegian Air Service in the United States”

  1. Joseph says:

    Thanks for the reminder, just submitted a comment. It looks like there’s some copy-paste job that tons of people did in support of blocking Norwegian from operating in the US. I don’t see why any consumer would do this unless they work for an airline.

  2. Gray says:

    Just a quick thought here, but based on the phrasing of the law, what are the odds that this would/wouldn’t “accidentally” tie the ME3 up? The only present route one of them runs presently is Emirates’ JFK-MXP route, but I’d honestly be stunned if some of their infamous employment contracts (e.g. requiring company permission to marry, lack of labor protections, and working conditions) would survive a challenge under this law.

  3. Smitty says:

    A great example of how our political representatives are bought, and paid for, by special interest groups. In this case, U.S. Air Carriers and their lobbyists.

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