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U.S., European Unions Agree: Ground NAI Scheme

BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, DC

Application of
Docket No. OST20130204
NORWEGIAN AIR INTERNATIONAL
LIMITED

for an exemption under 49 U.S.C. § 40109
and a foreign air carrier permit pursuant to
49 U.S.C. § 41301 (USEU Open Skies)

JOINT ANSWER OF AIR LINE PILOTS ASSOCIATION, TRANSPORTATION

TRADES DEPARTMENT, AFLCIO, EUROPEAN COCKPIT ASSOCIATION,

ASSOCIATION OF FLIGHT ATTENDANTSCWA, INTERNATIONAL

ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, AND

TRANSPORT WORKERS UNION OF AMERICA TO MOTION FOR EXPEDITED

TREATMENT BY NORWEGIAN AIR INTERNATIONAL LIMITED

Edward Wytkind, President
Transportation Trades Department,
AFLCIO
815 – 16th Street NW
Washington, DC 20006
Phone: 2026289262
Fax: 2026280391
edw@ttd.org

Jonathan A. Cohen
Russell Bailey
David M. Semanchik
Air Line Pilots Association
1625 Massachusetts Avenue NW
Washington, DC 20036
Phone: 2027974086
Fax: 2027974014
Jonathan.Cohen@alpa.org
Russell.Bailey@alpa.org
David.Semanchik@alpa.org

Philip von Schöppenthau,
Secretary General
European Cockpit Association
Rue du Commerce 2022
B1000 Brussels, Belgium
Phone: 3227053293
Fax: 3227050877
pvs@eurocockpit.be

Sara Nelson, International President
Association of Flight AttendantsCWA
501 3rd Street NW
Washington, DC 20001
Phone: 2024340574
Fax: 2024341319
snelson@cwaunion.org

Sito Pantoja, General Vice President
International Association of Machinists
and Aerospace Workers
9000 Machinists Place
Upper Marlboro, MD 20772
Phone: 3019674514
Fax: 3019674591
spantoja@iamaw.org

Harry Lombardo, President
Transport Workers Union of America
501 3rd Street NW, 9th Floor
Washington, DC 20001
Phone: 2027193900
Fax: 2027193828
Dated: June 10, 2015

BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, DC

Application of
Docket No. OST20130204
NORWEGIAN AIR INTERNATIONAL
LIMITED

for an exemption under 49 U.S.C. § 40109
and a foreign air carrier permit pursuant to
49 U.S.C. § 41301 (USEU Open Skies) )

JOINT ANSWER OF AIR LINE PILOTS ASSOCIATION, TRANSPORTATION

TRADES DEPARTMENT, AFLCIO, EUROPEAN COCKPIT ASSOCIATION,

ASSOCIATION OF FLIGHT ATTENDANTSCWA, INTERNATIONAL

ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, AND

TRANSPORT WORKERS UNION OF AMERICA TO MOTION FOR EXPEDITED

TREATMENT BY NORWEGIAN AIR INTERNATIONAL LIMITED

The Air Line Pilots Association, the Transportation Trades Department, AFLCIO

and the European Cockpit Association1 hereby submit this Answer to the motion of

Norwegian Air International Limited (“NAI”) for expedited treatment. Attached to the

motion is a letter from Bjorn Kjos, the CEO of Norwegian Air Shuttle (“NAS”), NAI’s

parent company, in which Mr. Kjos purports to make two commitments and suggests

that these commitments provide the basis for DOT to approve NAI’s application for a

foreign air carrier permit. As we will show, the alleged “commitments” are without

substance, certainly with respect to pilots, and serve to further demonstrate why

approval of NAI’s application would be at odds with Article 17 bis of the U.S.EU Air

Transport Agreement. For all the reasons previously identified by opponents to NAI’s

application2 and because, as shown below, the new alleged “commitments” change

nothing, the Department should deny NAI’s application. However, if the Department

believes that additional information is necessary to make a determination in this

proceeding it should issue information requests to Norwegian3 to obtain that

information or hold a hearing at which representatives of Norwegian may be examined

about the founding and structure of NAI, including the compensation and laws that

will apply to NAI’s air crew.

DISCUSSION OF THE MOTION

The first “commitment” is that NAI will “use only European and U.S. pilots and

crews on NAI transatlantic flights.” Letter at 1. With respect to pilots, this is no

commitment at all. The citizenship of pilots has never been at issue in this case. From

the inception of its existing transatlantic services, Norwegian has used pilots with EU3

passports and EU pilot licenses. What is at issue are the laws and the terms and

conditions of employment that apply to NAI’s pilots and flight attendants and the

“commitment” makes no statement about that. The pilots continue to be employed by

Global Crew Asia PTE Limited, a Singapore hiring company, on fixedterm individual

employment contracts with total compensation and labor protections substantially

inferior to pilots employed by Norwegian. See Declaration of Jack Netskar (“Netskar

Dec.”) ¶¶ 1522 (filed with ALPA’s Answer dated Dec. 17, 2013 (Doc. No. 0002)).

The flight attendants have been employed in a like manner. They continue to be

employed by an external hiring company on fixedterm contracts. The laws, terms, and

conditions of employment that apply to them are unclear. Such laws, terms, and

conditions have been the core concern of the Labor Parties with NAI from the outset.

The second “commitment” is that NAS will offer NAI pilots and cabin crew “the

opportunity to transfer their employment to a company in the Norwegian Group at the

end of [a 24 to 36 month] transitional period.” This would be in keeping with NAS’ socalled

“firm policy” with respect to flight crew whose services it utilizes but who are

initially employed at employment agencies. Letter at 2.

This “commitment,” which is not even mentioned in the motion, does not

withstand scrutiny. To our knowledge, NAS’ firm policy does not appear in any

company handbook. Declaration of François Ballestero (“ETF Dec.”) ¶ 9 (attached

hereto). Nor does it appear in the company’s intranet. Id. Nor is it publicly available

through established company channels. Id. Nor does it appear in the individual

employment contracts of the Singaporecontract pilots who operate longhaul services

on behalf of NAS and NAI. Netskar Dec. Attachment A. And, to our knowledge, no

agencyhired pilot or flight attendant who has worked on board a Norwegian 787 has

been hired by another Norwegian Group company.

The other “compan[ies] in the Norwegian Group” to which Mr. Kjos refers are

purely staffing company subsidiaries: essentially, the equivalent of whollyowned

employment agencies. Netskar Dec. ¶14. The employment terms and conditions

offered by these internal employment agencies are not comparable to those of pilots

employed by Norwegian under Norway’s laws. ETF Dec. ¶¶ 36. Moreover, the

alleged “firm policy” to transfer pilots from agencies to the Norwegian Group

companies has not been respected by Norwegian in the past. Rather, NAS’ actions

show that such a policy is frequently honored only in the breach. Id. ¶ 8. In addition,

the percentage of unionized pilots at NAS has dropped from over 90 percent to less

than 50 percent in the last 4 years. Id. ¶ 10; Parat Answer to DOT Notice, dated Feb. 13,

2014 (“Parat Answer”) ¶ 4 and Appendix 2 (Doc. No. 0031). NAI has failed even to

address, much less contest, this evidence.

Mr. Kjos’ alleged “commitments” are the latest ‐‐ but not the only ‐‐ attempt by

NAI to shift the focus of the Department to inapposite or misleading matters

throughout this proceeding. NAI asserted that traffic rights to nonU.S. destinations,

and access to better financing and insurance under OECD rules and the Cape Town

Convention, were the reasons NAS established NAI outside of Norway. The opponents

to the application showed why this assertion appears to be untrue.4 NAI has also

asserted that Norwegian has no tradition of discouraging unionization; ALPA, TTD,

ECA, and the Norwegian union Parat demonstrated how Norwegian’s actions belie

such alleged friendliness to labor.5 NAI has asserted that the individual employment

contracts were governed by the law of Thailand, the country of the pilot base; ALPA,

TTD and ECA showed how this could not possibly be true because Singapore law

applied.6 NAI also asserted that the Singaporecontract pilots’ “dollarized average

gross payments” (an undefined term) were on par with those of Norwegian pilots;

ALPA illustrated that this opaque term hid the tax and social costs for which a

Singaporecontract pilot, but not a Norwegian pilot, would be responsible.7

In short, none of the previous explanations or assertions hold up to scrutiny.

Neither do the alleged “commitments.”

The asserted facts in the record compel an adverse decision by DOT. As we

argued before, NAI’s application continues to “undermine the labor standards or the

laborrelated rights and principles” of Norway and the United States. See ALPA

Answer to Application of NAI, dated Dec. 17, 2013 at 2 (Doc. No. 0002); U.S.EU

agreement, Article 17 bis.

Given that the alleged “commitments” change nothing, DOT should issue a

show cause order stating that it proposes to deny NAI’s application for a foreign air

carrier permit. If the Department believes that it would benefit from having more

information before it issues such an order, including information about Mr. Kjos’

alleged “commitments,” it should issue document production requests, and/or should

hold a hearing at which representatives of Norwegian may be examined about the

founding and structure of NAI, including the compensation and laws that will apply to

NAI’s air crew. See Joint Reply of ALPA, TTD and ECA, dated Aug. 25, 2014 (Doc.

No. 0161).

CONCLUSION

For the foregoing reasons, as well as those in our earlier pleadings in this

proceeding, the Department should deny the motion for expedited treatment, and issue

a show cause order proposing to deny the permit application.

Respectfully submitted,

__________________________________

s/ Jonathan A. Cohen
Russell Bailey
David M. Semanchik
Air Line Pilots Association
1625 Massachusetts Avenue NW
Washington, DC 20036
Phone: 2027974086
Jonathan.Cohen@alpa.org
Russell.Bailey@alpa.org
David.Semanchik@alpa.org

s/ Edward Wytkind __
Edward Wytkind, President
Transportation Trades Department,
AFLCIO
815 – 16th Street NW
Washington, DC 20006
Phone: 2026289262
edw@ttd.org

/s/ Philip von Schöppenthau
Philip von Schöppenthau, Secretary General
European Cockpit Association
Rue du Commerce 2022
B1000 Brussels, Belgium
Phone: 3227053293
pvs@eurocockpit.be

/s/ Sara Nelson _________
Sara Nelson, International President
Association of Flight AttendantsCWA
501 3rd Street NW, 10th Floor
Washington, DC 20001
Phone: 2024340574
Fax: 2024341319
snelson@cwaunion.org

/s/ Sito Pantoja____________________
Sito Pantoja, General Vice President
International Association of Machinists
and Aerospace Workers
9000 Machinists Place
Upper Marlboro, MD 20772
Phone: 3019674514
Fax: 3019674591
spantoja@iamaw.org

/s/ Harry Lombardo__________
Harry Lombardo, President
Transport Workers Union of America
401 3rd Street NW, 9th Floor
Washington, DC 20001
Phone: 2027193900
Fax: 2027193828

Dated: June 10, 2015

CERTIFICATE OF SERVICE

I certify that I have, on this 10th day of June, 2015, served the foregoing Joint

Answer by causing a copy to be sent by electronic mail or fax as identified below:

The Honorable Penny Pritzker
Secretary of Commerce
TheSec@DOC.gov
NovelliCA@state.gov
Amb. Anne Anderson
norma.ces@dfa.ie
Amb. David O’Sullivan
fiona.kitson@eeas.europa.eu
kathryn.thomson@dot.gov
Violeta.Bulc@ec.europa.eu
Margus.Rahuoja@ec.europa.eu
romanow@pillsburylaw.com
peter.nelson@pillsburylaw.com
steve.morrissey@united.com
dan.weiss@united.com
sascha.vanderbellen@delta.com
howard.kass@usairways.com
robert.wirick@aa.com
sschembs@cwaunion.org
john.hanlon@elfaa.com
dberg@airlines.org
jcasey@airlines.org
kglatz@airlines.org
clytle@portoakland.com
kgeorge@broward.org
michael.whitaker@faa.gov
jesse.elliot@faa.gov
john.chen@faa.gov
nicholas.tsokris@faa.gov
john.allen@faa.gov
EngleTS@state.gov
NewsomeRC@state.gov
mrichardson@swapa.org
ejames@jamhoff.com
eugene.alford@trade.gov
david.batchelor@sesarju.eu
ottar.ostnes@sd.dep.no
paul.gretch@dot.gov
robert.finamore@dot.gov
nssparks@fedex.com
dpdean@jamhoff.com
vegard.einan@parat.com
thore.selstad.halvorsen@parat.com
minister@dttas.ie

Via Fax

The Honorable John F. Kerry
Secretary of State
Fax: 2026471579

__________________________________

ATTACHMENT

BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, DC

Application of
Docket No. OST-2013-0204
NORWEGIAN AIR INTERNATIONAL
LIMITED

for an exemption under 49 U.S.C. § 40109
and a foreign air carrier permit pursuant to
49 U.S.C. § 41301 (US-EU Open Skies)

DECLARATION OF FRANÇOIS BALLESTERO, POLITICAL SECRETARY FOR

CIVIL AVIATION OF THE EUROPEAN TRANSPORT WORKERS FEDERATION

(ETF), IN SUPPORT OF JOINT ANSWER

OF AIR LINE PILOTS ASSOCIATION, TRANSPORTATION TRADES

DEPARTMENT, AFL-CIO, AND THE EUROPEAN COCKPIT ASSOCIATION, TO

MOTION FOR EXPEDITED TREATMENT BY NORWEGIAN AIR

INTERNATIONAL LIMITED (NAI)

1. My name is François Ballestero. I am the Political Secretary for Civil

Aviation of ETF. The ETF represents more than 2000 pilots and cabin crew in

Norwegian, thru our affiliate Parat, based in Norway.

2. The following responds to Mr. Bjorn Kjos’ letter filed by Norwegian Air

International (NAI) with DOT.

3. As a general rule, pilots hired through an agency have inferior job

protection than pilots employed directly, and permanently, with a Norwegian

company. This is especially true with regard to lay-offs, where hired personnel in most

European countries are considered “temporary workers” and will therefore be laid off

before permanent employees, regardless of seniority or time of service. In addition, the

temporary contracts we have seen typically describe a significantly shorter notice

period (only 30 days) compared to most national laws which typically describes notice

periods of 3 months and up.

4. Also, we can mention that while some of the temporary contracts offered

by agencies providing pilots for Norwegian describe a 60-day notice period for base

changes, numerous pilots have reported that instead of the 60-day notice period, they

receive a cancellation of their current contract and their current base with a 30-day

termination notice, only to receive a new contract and base assignment, often in the

same email, thus repeatedly circumventing the contractually agreed upon 60-days base

change notice.

5. Agency-employed pilots are also reporting problems being accepted into

their base-country’s social security systems due to the number of countries involved in

their employment. For example, pilots may be hired by an agency located in one

country, employed by an agency who rents them to Norwegian, which is based in

Norway, and based in a third country, such as Spain.

6. To our knowledge, agency-pilots are not enrolled in any pension scheme.

Most European countries require a mandatory pension schemes for employees of a

company, while agency-pilots fall outside of the laws because of their “temporary”

status.

7. It is our impression that Norwegian, once again is playing with words due

to their new and very complex corporate structure. For example, the pilots at the

Helsinki base in Finland, along with a small group of pilots based in Spain, have been

offered “employment” in a “company in the Norwegian Group.” The reality is that,

while technically employed by a Norwegian company, all employee-related functions,

including human resources functions, have been outsourced back to the same agencies

through which the pilots were hired (Proffice Aviation and OSM, respectively).

8. We also wish to address Mr. Kjos’ statement in his letter about a

“transitional period” for pilots to move from an employment agency to a company

within the Norwegian Group. The 24-36 month “transitional period” is a result of hard

negotiations with the Norwegian Pilot Union (NPU) which represents Scandinaviabased

short haul pilots. The agreement describes a maximum period of 24 months for

the contract pilots before being hired by Norwegian. The additional 12 months were

agreed upon for the sole purpose of closing down a base, which after 24 months of

service proves not to be economically viable. We have consistently experienced that

Norwegian has exceeded the 24-month “transitional period” without any intention to

close down the base and has continued to employ agency-pilots. In the case of Helsinki,

more than 40 months passed before pilots were offered employment in one of the

Norwegian Group companies, a clear breach of the employment agreement.

9. We do not possess any information indicating the long-haul pilots have

been informed of this so-called “transitional period” agreement with the NPU.

Furthermore, it is our clear understanding that neither this agreement with NPU, nor

any company policy, is publicly known. Nor is it included in any company policy

handbook. Nor is it available through established company channels. Nor can it be

found on the Norwegian Group intranet. Nor does it appear, according to our

understanding, in any individual employment contracts signed by the long-haul pilots.

In addition, in an attempt to pursue the policies stated in the employment agreement,

the Spain-based pilots have organized themselves under SEPLA, the Spanish pilots’

union, and have made repeated attempts to engage Norwegian, or representatives of

Norwegian, for the purpose of constructive talks. For the past six months, these

repeated attempts have been completely ignored by Norwegian. As a reply to these

efforts made by pilot representatives, Norwegian has stated that it does not have any

pilots in Spain, but OSM does. What Norwegian apparently means by this is that OSM,

the local hiring agency for the Spanish pilots, is the employer.

10. Lastly, we want to reiterate a point that our affiliate Parat made in their

earlier filing to the DOT about the state of unionization among pilots at Norwegian. In

that filing, Parat stated, “Norwegian Air Shuttle and its affiliate companies have gone

from having about 96% organized pilots just a few years ago to having about 48% at the

moment. The rate of unionized pilots is dropping at an accelerated pace. The Company

is actively working to make it harder for the unions, as they have taken direct action to

split up and weaken unions, to offer individual contracts to pilots and to move and split

up the company in any affiliates.” Answer of Parat to DOT Notice, 5. This state of

affairs has gotten worse, not better, since our earlier filing.

I declare under the penalty of perjury under the laws of the United States that the

foregoing is true and correct to the best of my belief.

François Ballestero

U.S., European Unions Agree: Ground NAI Scheme (511 kb)

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