[As published By Madhu Unnikrishnan in Aviation Week]
Norwegian Air International (NAI) and its supporters say the U.S. Transportation Department (DOT) does not have the right to deny its application for a foreign air carrier permit to operate in the U.S., while organized labor, led by the Air Line Pilots Association (ALPA), argue the opposite: that the public interest is best served by the DOT unilaterally denying NAI’s application.
In dueling filings with the DOT, NAI and labor—among other stakeholders, including travel industry advocacy groups and airlines—lay out their cases, which turn on Article 17 bis of the U.S.-EU open skies agreement. This amendment to the treaty protects the “social dimension,” stipulating that carriers operating in the signatories’ territories must obey local labor laws. In a high-level meeting between the DOT and EU officials last month, the European Commission (EC) said Article 17 bis does not provide DOT with the unilateral right to deny NAI’s application. “Any unilateral decision to deny an application using Article 17 bis runs against the letter and spirit of the agreement,” the EC said.
NAI cites the EC, arguing that “no basis exists for the [DOT] to renege on its side of the open skies bargain with the European Union.” “We commend Secretary Foxx in seeking the Commission’s comments on this pertinent issue – and the Commission for its sound judgment that is consistent with established legal norms of treaty interpretation, the Joint Declaration of the Chairmen of the U.S. and EU delegations who led the negotiation of the historic Open Skies Agreement, and international law,” NAI CEO Asgeir Nyseth said.
John Byerly and Daniel Calleja, the U.S. and EC officials who led the negotiations on the open-skies treaty, supported NAI’s response. NAI further cites three former Transportation Secretaries, Mary Peter, Andrew Card and Norman Mineta, for their support for its application.
ALPA and the Transportation Trades Department jointly called on DOT to unilaterally rule against NAI’s application for a foreign air carrier permit, as well as for an exemption that would allow the carrier to serve the U.S. while its case is pending. “It is clear that DOT may deny unilaterally NAI’s application for an exemption,” the unions say. NAI’s application fails to meet the test of whether NAI’s service is in the public interest as defined by U.S. law, which was not pre-empted by the open-skies agreement.
The unions’ arguments center on NAI’s plans to operate from Ireland with an Irish air operator certificate and to source crews from there, elsewhere in the EU, the U.S. and Asia. This is “forum shopping,” which is in violation of Article 17 bis and could threaten the U.S. airline industry, if the “flag of convenience” model’s effect on the maritime industry is to be taken as a salient example. “This company is forum shopping around the world for the cheapest labor possible,” TTD President Ed Wytkind told reporters.
“We adamantly disagree with the EC,” ALPA President Capt. Lee Moak told Aviation Week editors on Aug. 18. Not only does the forum shopping threaten U.S. airlines, but Moak argues that Irish oversight of a carrier operating with crews from Asia could raise safety and security concerns. “The safety and security issue in the flag of convenience model gives us great pause.”
This is not just a battle between NAI and ALPA. Other labor groups, including the European Cockpit Association, the Allied Pilots Association and the Association of Fight Attendants-CWA, among others, have joined the fight.
The issue has tipped off a maelstrom of conflicting comments in the DOT docket. Several airlines, including Air France, KLM, SAS, Austrian, Delta Air Lines, United Airlines and American Airlines, have urged the DOT to deny NAI’s application. On the other hand, groups such as the American Association of Travel Agents are calling for its approval, as are cargo carriers such as FedEx and Atlas Air.
NAI submitted its applications for a foreign air carrier permit and exemption late last year. DOT approvals for European carriers usually occur in a matter of weeks.