Rejected: Norwegian Air Shuttle Bid for Flights Between Europe and the United States — But…

A nthony Foxx — who is the Secretary of Transportation of the United States — earlier this week issued a temporary setback to Norwegian Air Shuttle by rejecting the request for the carrier to immediately operate flights to the United States as Norwegian Air International while the airline awaits a permanent decision by the federal government on its application.

Back in October of 2013, an announcement from Norwegian Air Shuttle proclaimed that the airline would launch service between Gatwick Airport south of London and three destinations located in the United States — New York, Los Angeles and Fort Lauderdale — as of July of 2014 using Boeing 787 “Dreamliner” aircraft for as little as $150.00 each way.

Existing flights to the United States are not affected by the rejected request, according to this article by Joan Lowy of the Associated Press.

The request by Norwegian Air Shuttle has been controversial. Members of the Air Line Pilots Association, International 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.

A petition to Anthony Foxx and Barack Obama — the current President of the United States — has almost 30,000 signatures supporting the position of the Air Line Pilots Association, International, which claims that “a decision to oppose Norwegian Air Shuttle’s application to fly in and out of the U.S. should be a no brainer for the White House. U.S. jobs and the future of the U.S. aviation industry are at stake. U.S. pilots, and the millions of American air travelers whose lives are in their hands, are watching this closely and are expecting a decision that chooses U.S. carriers and pilots over sketchy foreign competitors.”

The actual petition is worded as follows:

Norwegian Air International is applying to fly into the U.S. using an anti-competitive business model. They are hoping to compete with America’s air carriers on our turf while evading fair regulation and labor accountability.

There’s nothing wrong with healthy competition – but there’s nothing healthy about the tactics Norwegian Air International plans to use to undercut US companies. If their application goes through there will be nothing healthy about the loss of US jobs that will follow.

Business practices like NAI’s are harmful to American jobs in the best of times. When our economy is struggling to recover after years of recession, they could be devastating. Protect tens of thousands of hardworking Americans by denying NAI’s application for a Foreign Air Carrier permit.

Norwegian Air Shuttle — the third-largest low-cost carrier in Europe — has 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.

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.

Although I appreciate you posting your comments back in October, I am asking these questions again: is there room for transatlantic service operated by low-cost carriers without posing a significant threat to the established legacy carriers currently operating transatlantic routes — or do the legacy airlines have a legitimate concern? Is it possible that there is a market of passengers who currently do not patronize the airlines currently operating transatlantic flights but would take advantage of the service to be offered by Norwegian Air Shuttle? Should there be a policy by the government of the United States to prevent “a race to the bottom in the international air travel market” and create a level playing field for commercial airlines based in the United States, as called upon by the Air Line Pilots Association, International?

One thing is for certain: this debate is far from resolved, as the carrier urged the Department of Transportation to quickly approve the application of Norwegian Air International…

10 thoughts on “Rejected: Norwegian Air Shuttle Bid for Flights Between Europe and the United States — But…”

  1. Christian says:

    Love the satire. at least, given that it’s so low key, I can only presume that it’s satire, since paying more for the same product seems a bit off. Obviously, offerering an alternative is good. The consolidation of the U.S. airline industry has left the 3 remaining carriers with an oversized sense of entitlement. A little competition should liven things up a bit.

    1. Brian Cohen says:

      There are a number of frequent fliers who often pay more for the same or similar product, Christian — especially when miles and points are involved.

      Competition would liven things up; but those opposed to it claim that the competition is unfair for a variety of reasons…

  2. ALCO says:

    This has been done in the maritime industry, where use of so-called “flags of convenience” allows shippers to use the lowest common denominator when it comes to labor, tax and other laws. It has completely decimated the US merchant marine fleet, which once spanned the globe, but is now largely relegated to intra-US shipping (there are rules similar to the prohibition of cabotage for domestic shipping).

    Let’s not make the same mistake twice.

  3. Robert says:

    Obviously, to anybody who has ever taken a basic economics class, when a union organization says it’s just not fair, the truth can be taken as being the exact opposite. Pilot (and FA, ground handler, etc. ) unions are a big reason the airlines in the US went bankrupt. They are criminals, con artists, and extortionist. Every single Latin American Airlines that flies to the US does so without the criminal pilot unions, but you never hear a word about that. Emirates does the same. It’s the US carriers fear over the loss of gouging customers, especially busienss customers, for the inflated Atlantic crossing flights.

  4. Joey says:

    What’s wrong with competition? Besides, I doubt every single seat on a norwegian flight JFK-LGW will cost 150 GBP! I read the article and it stated the cost as 150 GBP, not USD. Just an FYI.

    Norwegian may use a similar marketing tactic that Megabus uses by stating it only costs $1 to take the bus from NYC to Boston or DC (when in reality only 1-2 seats cost $1 and you have to buy those months in advance.)

    I do know Norwegian already got some bad press in LAX since passengers were stranded there for a few days when their 787 had a mechanical failure…. a lot of them vented on Twitter and used #neverflynorwegian
    http://abc7.com/travel/norwegian-air-passengers-stranded-at-lax-for-2-days/220262/

    As for me, I flew Norwegian last week CPH-JFK and I got to JFK in one piece. Food was ok and IFE was minimal but did its job. Overall service was ok since I wasn’t expecting much given it is a low-cost carrier.

    1. Brian Cohen says:

      Thank you for the correction, Joey

      …and I would bet that you would be correct about Norwegian having a similar marketing tactic to Megabus. Not only would you have to buy those $1.00 fares on Megabus well in advance; but many of them are usually gone the first day the new schedule is released.

  5. Pizzaman says:

    Full disclosure: I’m a free market guy and really not a fan of unions. I really don’t see the issue here. If people want Ryanair quality service across the pond for pennies, then why should the government step in and say no? If the big 3 can’t (don’t want to) compete on price then they can find a different way to attract customers. Or, attract different customers.

    Using the government to shield you from competition just strikes me as a strategy for the weak.

    1. Brian Cohen says:

      I might be “opening a can of worms” here, Pizzaman, but a similar argument could probably be said about the government pertaining to certain aspects of flight safety when dealing with airport security.

      Sometimes I wonder if people are too dependent on government…

      1. Pizzaman says:

        Brian,

        I understand your “devil’s advocate” position. I do see the slippery slope, but hope that smart folks could see the difference.

  6. Ryan says:

    I side with Norwegian on this. Let the market decide. We already will be facing higher fares with our remaining domestic-based airlines due to their consolidation. They don’t need any more “protection”.

    I disagree with ALPA that Norwegian’s entry would constitute “unfair” competition. The fact that the rules under which they’re operating are different than for U.S. carriers, and permit lower operating costs, is just a fact of life.

    I’m not sure Norwegian is really all that much of a threat at the moment anyway. Having looked at their offerings before, their fares can be nearly that of others when you add in the fees for a seat reservation, meal, and baggage. But what would put me off more is the stories I’ve read on FT about horrible delays during IRROPS. However, that’s just me, and I’m all for letting the flying public at large decide rather than the government.

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