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The Seattle Times Reports on Norwegian Air Decision

As reported by Dominic Gates in The Seattle Times

In a decision released Friday, the U.S. Department of Transportation (DOT) finally granted European low-cost carrier Norwegian Air a permit that will allow it to expand flights to the U.S., despite fierce opposition from large U.S. airlines and labor groups.

Norwegian is a big Boeing customer. It already flies more than 100 single-aisle 737s in Europe and ten 787 Dreamliners on long-haul international flights to the U.S. and Asia.

The airline has outstanding orders for 21 more 737s, 108 new 737 MAXs and 19 more 787s.

The airline applied three years ago for a foreign-air-carrier permit for a subsidiary based in Ireland that would allow it to to seamlessly operate its long-haul fleet between destinations in the U.S., Europe and Asia.

A decision was delayed after U.S. transatlantic carriers American, Delta, and United, joined by major labor unions, lobbied intensely to block Norwegian, arguing that its low-cost operation would be unfair competition and would reduce wages and undermine labor standards.

But the final order states that the bilateral Open Skies agreement between the U.S. and Europe — which opened up and deregulated airline routes — requires the DOT to grant Norwegian approval.

The decision comes just a day after the European Union formally accused the U.S. of breaching the Open Skies agreement by not granting the permit.

Norwegian already flies Boeing 787 Dreamliners on prime international routes across the Atlantic from London, Paris and Scandanavia into New York, Los Angeles, Oakland, Orlando and Fort Lauderdale.

This week, the airline said it will add a Paris-Orlando flight this summer with fares starting at $229 one-way.

Norwegian chief executive Bjorn Kjos has said he needs the new permit recognizing his Irish subsidiary to allow the airline to shuttle its Dreamliners freely from all over Europe to leisure destinations both in the U.S. and Asia.

Ireland is covered by open skies agreements between the EU and Asian countries, whereas Norway — which is not a member of the EU — is not.

With the Irish airline certificate, Norwegian can now fly from Bangkok, Thailand, to London, then on to New York, without ever touching down in Oslo.

Edward Wytkind, president of the Transportation Trades Department, AFL-CIO, said in an interview that argument is just a cover to allow Norwegian to hire low-wage flight and cabin crews in Asia.

The DOT said in its final order that Norwegian offered assurances of voluntary “changes to its hiring and employment practices” that will address this criticism of its U.S. labor strategy by opponents.

Wytkind said Norwegian acting upon those assurances should have been made a condition of approval, rather than leaving it as a voluntary policy.

“We believe this is a betrayal of American aviation workers,” Wytkind said. “It’s an outrageous decision.”

During the presidential election, Hillary Clinton came out against granting Norwegian the required permit. President-elect Trump did not express a position on the issue.

On Friday, Rep. Rick Larsen, D-Everett, issued a statement calling the DOT decision “a slap in the face to American workers.”

In past interviews with the Seattle Times, Kjos said the airline will set up flight crew bases at its destinations, including New York and Florida as well as Bangkok, and will pay employees the going rate at those locations.

In October, Norwegian announced a drive to recruit “a large pool of American pilots over the next few years” and said it it will have “more than 500 American cabin crew by the end of this year.”

Kjos attributed most of the political opposition to U.S. airlines “trying to protect their most lucrative international routes” from low-cost competition.

He argued that the low-cost model will greatly expand transatlantic travel and so create thousands of new aviation jobs.

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