[As published By Edward Wytkind in The Foreigner]
In a global economy starving for good jobs, the last thing we need is airline companies that game trade agreements and try to undermine fair competition. Unfortunately, Norwegian Air Shuttle (NAS) has cooked up just such a scheme, and the stakes are high on both sides of the Atlantic.
In a bid to expand its transatlantic operations and offer cut-rate fares, NAS has created a subsidiary – Norwegian Air International (NAI) – which has obtained an air operators certificate in Ireland. Why Ireland? Because this allows NAI to bypass Norwegian labor laws and hire Thailand-based pilots whose individual employment contracts are governed by Singaporean law. In other words, NAI wants to scour the globe for the cheapest labor it can find and exploit.
NAI’s thinly veiled effort to cut labor costs and undercut their competition has run up against a wall of opposition both in Europe and the U.S., but rather than scuttling the proposal, NAI has only ratcheted up the pressure. Late last month, NAS CEO Bjorn Kjos sent a letter to Ireland’s Transport Minister threatening to abandon its plans and asking him to intervene with the U.S. government.
The Obama Administration is a key player, because in order to offer expanded service to American cities, NAI needs a foreign air carrier permit from the U.S. Department of Transportation. The administration has ample grounds to say no to NAI, as the proposed operating arrangement violates the U.S.-EU Air Transport Agreement (ATA), which expanded aviation trade but expressly rejected any use of the expanded rights to “lower labor standards.” These protections were negotiated into the agreement to stop NAI-like schemes from gaining a foothold in the transatlantic market.
The American labor movement is not taking anything for granted, and has united in opposition to NAI’s application, with more than 20 unions representing hundreds of thousands of workers calling on U.S. Secretary of Transportation Anthony Foxx to reject NAI’s application. The labor coalition made their case in a blunt letter to Foxx, stating, “[W]e have seen first-hand the effects of un-checked globalization on the American workforce. Too often, poorly conceived and badly enforced free trade agreements have led to the offshoring of U.S. jobs. That is why U.S. industries that previously formed the backbone of our economy have seen dramatic job losses that have coincided with the erosion of the middle class.”
Organizations representing European airline workers have been just as adamant in opposing NAI’s low-road ploy. The European Cockpit Association, which represents nearly 40,000 professional flight crew in 38 European countries, described NAI’s plans as “an attempt to engage in social dumping at the expense of EU member states and any states NAI may operate to or from.” Parat, which represents 32,000 workers in Norway including nearly 2,000 at Norwegian Air Shuttle and its affiliates, has stated that “NAI is being established in Ireland because it wishes to get out from under Norwegian labor laws.”
The NAI model is already causing damage in Norway. Rather than expanding its long-haul service with Norwegian workers, NAS is using a flag of convenience strategy to relocate to Ireland and hire Asian flight crew members. This model could become the norm, with airlines seeking to move from any country with strong labor and social laws in favor of countries with lower standards. The result will be bottom-of-the-barrel wages and labor rules across the transatlantic market, killing good jobs in the U.S. and Europe.
Both European and American labor organizations understand that while airline workers are the immediate target of NAI’s maneuver, workers across the breadth of the global economy are facing the same threat. They know that it makes no sense to introduce new downward pressures on middle-class jobs in the airline industry or any other sector.
The NAI scheme has no place in the ever-expanding aviation trade relationship between the U.S. and Europe. If approved, it will set a standard that airlines can only compete for international routes by searching the globe for the lowest labor standards. The Norwegian scheme takes direct aim at good jobs on both sides of the Atlantic and must be rejected.