Norwegian Air Shuttle Denied Temporary Exemption by the Department of Transportation

T he application by Norwegian Air Shuttle for exemption authority to establish a new long-haul operation based in the United Kingdom has dismissed by the Department of Transportation of the United States on procedural grounds, citing that the parties opposed to the application “have raised a number of significant issues, in many instances directly overlapping the types of issues before us in the still pending proceeding involving the permit application of Norwegian Air International Limited.”

The Department of Transportation “typically reserves its exemption powers in awarding foreign air carrier authority to situations where the circumstances of a case are sufficiently clear-cut to permit acting, at least for a limited term, without the additional procedural protections of show-cause procedures and § 41307 review”, according to this document which summarizes the order dismissing exemption. “The Department has already characterized those issues as novel and complex in the NAI context, and it reaches the same conclusion as to the present proceeding. In these circumstances, the Department does not find that grant of a temporary exemption to Norwegian UK is appropriate or in the public interest. Accordingly, the Department is dismissing Norwegian UK’s request for an exemption while it continues to review the applicant’s permit application.”

Norwegian Air Shuttle Denied Exemption by the Department of Transportation

While the official decision released by Jenny T. Rosenberg — who is the acting assistant secretary for Aviation and International Affairs of the Department of Transportation of the United States — is perceived as a setback for Norwegian Air Shuttle, it will not affect the current transatlantic services operated by the ultra-low-cost airline to the United States using a license granted by regulators in Norway.

Additionally, the Department of Transportation will continue to review the plan of Norwegian Air Shuttle and is still to complete its approval for a license for the airline to establish a base in Ireland for long-haul flights. Aviation authorities in the United Kingdom already support the sixth largest low-cost airline in the world on its initiative to increase its transatlantic service to the United States.

Norwegian Air Shuttle had been able to take advantage of loopholes which are currently unavailable to airlines based in the United States. These loopholes include registering their fleet of long-haul aircraft in Ireland while hiring flight crew personnel based in Thailand who would reportedly work under Singaporean contracts.

Approval by the Department of Transportation would have allow the airline to use the same aircraft for the operation of flights to countries other than the United States — such as Brazil and South Africa, for example.

Not the First Setback

The decision — which was released yesterday — was not the first setback suffered by Norwegian Air Shuttle. In September of 2014, Anthony Foxx — who is the secretary of the Department of Transportation of the United States — rejected a request for the carrier to immediately operate flights to the United States as Norwegian Air International while the airline awaited a permanent decision by the federal government on its application.

Two months ago, four members of the House of Representatives of the United States introduced a strongly-worded bipartisan bill to block the decision issued by the Department of Transportation which granted tentative approval to Norwegian Air Shuttle to add more flights to the United States.

Despite the setbacks – according to this official statement from the airline itself — “Norwegian is confident that it will receive its permanent authority” and that “Norwegian UK should be entitled to a Foreign Carrier Permit under the terms of the Open Skies Agreement.”

Support…

The request by Norwegian Air Shuttle has been quite controversial. Earlier this year, the Department of Transportation had temporarily opened an area for public comment where submissions by you and other interested parties would be read and considered before a final order was issued in this matter.

Those who side with Norwegian Air Shuttle believe that the increased competition and lower airfares will give consumers more options and allow more travelers to be able to afford transatlantic flights.

Charlie Leocha — who is the chairman and founder of Travelers United, which is an advocacy membership organization that represents all travelers — had given ten reasons why Norwegian Air Shuttle should fly to the United States in this article. Those reasons include more choice for the consumer; result in lower international airfares; increased travel and tourism spending in the United States; and the creation of more jobs.

No comment was available from Charlie Leocha at this time in response to the decision.

…and Opposition

Meanwhile, members of the Air Line Pilots Association, International — which is one of the entities that staunchly opposed the application and considered Norwegian Air Shuttle as a threat to the aviation industry in the United States as far back as October of 2013 — have been concerned that the flights present a threat to the aviation industry in the United States because they allegedly would undercut the airfares of carriers based in the United States by as much as 50 percent on comparable routes; and members of the advocacy organization also accused the ultra-low-cost carrier of attempting to circumvent some labor and tax rules with the proposed establishment of overseas bases to reduce its costs.

“The Air Line Pilots Association, Int’l (ALPA) praised today’s U.S. Department of Transportation (DOT) decision to deny Norwegian Air UK’s (NAUK) foreign air carrier permit exemption application as a significant milestone in the drive to ensure fair competition for U.S. airlines in the global marketplace”, according to this article which was posted in response to the decision.

Summary

There is a lot of seemingly unnecessary complexity which is one of the factors preventing Norwegian Air Shuttle from operating more transatlantic flights to and from the United States.

As I mentioned in this article, 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…

…but only on the condition that everything is on the “up-and-up”, legal and in order — and perhaps less complexity and more transparency in the structure and operations of Norwegian Air Shuttle may be one of the answers to ultimately having its application approved by the Department of Transportation.

Source: Norwegian Air Shuttle.

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