Norwegian US licence battle continues
As Published by Sarah bostock
Norway-registered parent company Norwegian Air Shuttle (NAS) has several subsidiaries. One of them is Norwegian Air International (NAI), registered in EU country Ireland.
This firm, which operates Ireland-registered Boeing 787 Dreamliners to America, wishes to employ rights afforded by the transatlantic EU-US Open Skies Agreement (also known as the Air Transport Agreement (ATA)).
Irish authorities have issued NAI with an Irish Air Operator’s Certificate (AOC), and the airline has lodged an application with the US Department of Transport (DoT) in order to be able to do enjoy the same ATA regulations as EU and American airlines do via their subsidiary.
Unions in Norway and America, US airlines, and US Senators, vehemently oppose this move, however. US politicians passed an amendment in 2014, blocking Norwegian’s bid for a foreign carrier permit.
Labour organisations term the airline’s efforts as being a “flag of convenience” move, claiming that it would give the carrier an unfair competitive advantage. Norway-registered parent company Norwegian Air Shuttle (NAS) is subject to Norwegian legislation.
Labour organisation officials also allege that crews flying on NAI’s planes avoid Norway’s strong labour protections, tax laws, and regulations. This is because personnel are employed via staffing agencies in Asia according to local laws.
Consequently, their working conditions and pay are inferior to those of their colleagues employed directly by Norwegian Air Shuttle (NAS) or its subsidiaries, the unions argue. The airline has termed these allegations regarding their US market attempt as “slanderous”.
Hardly any details
The outcome of NAI’s application is still pending, and Norwegian has established another company called Norwegian Air UK Limited – which unions abbreviate to NAUK.
Last year, the UK Civil Aviation Authority (CAA) issued Norwegian (which has a hub at Gatwick) with an Air Operator’s Certificate (AOC). NAUK filed for a foreign air carrier permit with the US Department of Transport (DoT) in December 2015.
The six unions – the Air Line Pilots Association (ALPA), Transportation Trades Department, AFL-CIO (TTD), Transport Workers Union of America, AFL-CIO (TWU), Association of Flight Attendants-CWA (AFA-CWA), International Association of Machinist and Aerospace Workers (IAM), and European Cockpit Association – have now sent a joint answer to the DoT regarding NAUK’s application.
Opposing it, they urge government officials to “request additional information from NAUK about its employment and business models.”
“While the application is scarce on details, this is a continuation of Norwegian’s efforts to introduce a flag of convenience airline into the transatlantic marketplace,” stated Ed Wytkind, Head of AFL-CIO (TTD) in an email.
The respective labour organisations write that NAUK has been established, in part, to provide long-haul service from European points to points in the US. Both NAUK and NAI (Norwegian Air International) are similar in these respects, in their opinion.
“While NAUK’s minimalist application does not disclose what the applicant’s plans are with respect to employment of the pilots and flight attendants who would staff its long‐haul operations, it is possible that NAUK intends to use the same model employed by NAI,” comment officials.
Moreover, unions declare that NAUK’s application contains no information about employment arrangements that will apply to the pilots and flight attendants who will staff the aircraft it intends to use to serve the US.
“NAUK may plan to hire those pilots and flight attendants directly; it may plan to contract them from a UK hiring agency; or it may plan to contract them from non‐EU hiring companies that employ the pilots and flight attendants on extra‐European contracts, as it is currently done by Norwegian and NAI,” they highlight, calling the situation an “ambiguity”.
“Governed by law”
Norwegian has staffed its Gatwick Boeing 737 operations by contracting for a number of London-based pilots employed by OSM Aviation (OSM), according to the six unions.
OSM has signed a recognition agreement with the British Air Line Pilots Association (BALPA) which covers those pilots.
The staffing firm has also engaged in negotiations with BALPA regarding “employment terms that will apply to them.”
“Some months ago BALPA was led to believe by OSM and Norwegian that the pilots who are to operate NAUK’s Boeing 787s – including NAUK’s 787 service to the US – would also be based in London, employed by OSM, and covered by the recognition agreement,” the unions further explain.
“To date, that has not happened, and Norwegian, NAUK, and OSM have not made clear the hiring and basing plans for the 787 pilots,” add officials.
The structure is similar regarding the London-based flight attendants on Norwegian’s Gatwick 737 flights, highlight the labour organisations.
OSM has a recognition agreement with labour union Unite – said to be Britain and Ireland’s biggest trade union, with 1.42 million members.
“But it is not clear whether the flight attendants who are to staff NAUK’s Gatwick 787 [Dreamliner] flights will be covered by that agreement,” write officials from the six unions.
Stuart Buss, Head of Communications UK at Norwegian Air Shuttle, comments about the six unions’ opposition regarding Norwegian Air UK’s (NAUK) application to the US Department of Transport (DoT).
In an email to The Foreigner, he writes that the carrier’s application is “an important step in our plans for continued growth, more routes and new jobs in the UK.”
“All current and future employees in our operation at UK bases will have contracts governed by UK employment law. Norwegian already has major operations and a large route network from UK airports, together with a large base of more than 400 pilots and crew at London Gatwick so we look forward to the DoT’s consideration of the UK application,” says Mr Buss.
Approval pending
Norwegian was hit by industrial action in 2015 regarding pilots’ terms of employment. Norwegian Pilots Union (NPU) pilots were employed through Scandinavia subsidiary Norwegian Air Norway (NAN) instead of Norway-registered Norwegian Air Shuttle (NAS). They were dissatisfied about this, and demanded a “real employer” as part of their dispute.
“The industrial action was about pilots wishing to be employed by the holding company Norwegian Air Shuttle. The pilots were and are still employed by companies in the Norwegian Group,” Mr Buss explains.
At the end of 2015, Norwegian Air Resources Holding (NARH), a fully-owned subsidiary part of the Norwegian group of companies, and registered in Dublin, announced that it had acquired 50 per cent of OSM Aviation.
OSM Aviation currently employs over 1,000 Norwegian crew members in Sweden, Finland, the UK, Spain, and the US. Three OSM companies – OSM Aviation AS, OSM Aviation Norway AS, and OSM Aviation Crew AS – are registered in Norway.
Norwegian Air Resources Holding (NARH) and OSM Aviation plan to acquire a 49 per cent stake in Norwegian’s companies in Spain, Finland, and the UK as of 30th June this year once the transaction is closed. According to the airline, employment conditions for pilots and cabin crew remain unchanged.
“For more than two years we have had a fruitful and professional relationship with OSM Aviation,” NARH CEO Krister Aarnio said in a statement.” Together we will build an even stronger global presence and competitiveness for further expansion in new markets.
Espen Bjarte Høiby, CEO of OSM Aviation AS, OSM Aviation Norway AS, former SAS pilot, and HRH Crown Princess Mette-Marit’s elder brother calls the deal “an important milestone for us.”
“Through this partnership we will further strengthen our global position as a leading and an attractive employer and a professional provider of quality, competence and human resources to our customers,” remarked Mr Høiby in the statement.
Closing of the NARH-OSM agreement is subject to approval by The European Commission under the EU Merger Regulation.