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Norwegian Air’s Low-Road Expansion Plans Get Cold Reception on House Floor

By Admin

Norwegian Air International’s (NAI) effort to import its low-road economic model found a new opponent: the entire House of Representatives, which approved by voice vote last night an amendment rejecting this flag of convenience scheme.

For months we’ve been calling NAI out – through our #denyNAI campaign – for its plan to expand transatlantic service in more U.S. markets using an Irish subsidiary that scours the globe for cheap labor, lax regulatory enforcement and the weakest social laws possible to evade collective bargaining.

Reps. Westmoreland (R-GA) and DeFazio (D-OR) offered an amendment that lays down a marker declaring that expansion of our airline trade relationships must not come at the expense of our laws and U.S. airline jobs.  And it embraces our view that foreign airlines such as NAI should not be permitted to game trade rules and gain an unfair competitive advantage over U.S. air carriers and their employees.  This was a pretty straightforward amendment as we pointed out in a letter to the House last night before the vote:

We support open competition.  We will not, however, stand idly by as one rogue airline seeks to undermine fair competition by scouring the globe for the cheapest labor and weakest regulations.  Those who comply with those laws and follow the rules have nothing to fear from this amendment.

The U.S. Department of Transportation (DOT) has the final authority over whether to approve Norwegian Air’s application to expand its transatlantic service to the U.S.  Saying yes to NAI will open the floodgates to a Walmart-style race to the bottom in the global airline industry, ultimately jeopardizing tens of thousands of middle-class jobs while again failing to enforce and properly implement trade agreements.  Rejecting Norwegian Air’s gambit will send a clear message that the U.S. has zero tolerance for operating schemes that violate trade agreements, sacrifice good jobs and leave airlines that play by the rules, both here and in Europe, at a competitive disadvantage.

For those who haven’t followed this sad saga Norwegian Air Shuttle 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.  But to execute this plan, NAI first needs a foreign air carrier permit from the U.S. Department of Transportation.

In addition to last night’s House floor vote, there has been a groundswell of opposition to NAI’s application in Congress.  40 Senators, including Commerce Committee Chair Jay Rockefeller (D-WV) and Aviation Subcommittee Chair Maria Cantwell (D-WA) wrote to Secretary Foxx expressing their concerns.  In the House, Transportation and Infrastructure Committee Ranking Member Nick Rahall (D-WV) and Aviation Subcommittee Chair Frank LoBiondo (R-NJ) and Ranking Member Rick Larsen (D-WA) are among the over 100 members who have urged Foxx to reject the application.  Most recently 33 GOP House members sent a letter led by Rep. Chris Collins (R-NY) stating that “the NAS/NAI business model appears to be designed expressly in a manner that undermines U.S. and Norwegian labor standards.  NAI’s filings submitted to [DOT] are misleading for a number of reasons, such as why NAI was established in Ireland and NAS’s treatment of its employees.”

The DOT 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.

Our government can’t ignore the groundswell of opposition to NAI’s scheme.  And it can’t ignore the rare unity displayed by the major airlines, the labor movement and lawmakers on both sides of the aisle.

Time to close this case.  NAI’s scheme should not fly.