As published by Keith Laing in The Hill
What ever happened to Norwegian Air’s open skies bid?
Norwegian Airlines’s bid to gain more access to airports in the U.S. and European Union was the talk of the aviation industry in 2014, but it appears to have stalled this year.
The company is attempting to gain access to airports covered under the U.S. and EU’s open skies agreement by establishing a subsidiary company that would be based in Ireland, a member of the EU.
The Scandinavian company has said it will be able to offer transatlantic flights for as low as $150 each way if its effort is approved by the Department of Transportation, where it has been pending since last year.
But the agency has been quiet on the issue this year, and attention in Washington has turned to a fight over international flight subsidies between U.S. and Middle Eastern airlines.
Transportation department officials say the Norwegian Air application is still under review, but airline industry observers say the company may be experiencing the equivalent of a pocket veto by Transportation Secretary Anthony Foxx.
“I have no inside info, but the possibility exists that this could sit for quite awhile longer,” AFL-CIO Transportation Trades Department President Ed Wytkind, who has opposed Norwegian Air’s application, told The Hill in an interview Tuesday.
Wytkind said the transportation department should still weigh in on the fight over Norwegian Air’s open skies bid, even if the attention of the aviation industry has seemingly moved onto the battle between U.S. and Gulf carriers.
“We still think it’s important to reject this thing, as it’s a pretty clear violation of the U.S.-EU agreement,” he said.
Norwegian Air has argued that critics such as Wytkind are unfairly maligning the company’s business practices because they are trying to protect their current positions in international flight markets.
The company’s CEO, Bjørn Kjos, said in a recent interview with AirwaysNews.com that the delay is hurting both his company’s bottom line and the U.S. airplane manufacturing industry.
“This is all about competition,” he told the news website. “The crazy thing is we have access to fly as much as we want to the U.S. The problem is we want to fly to other parts of the world, but can’t because we don’t have [U.S. Department of Transportation] approval. We had to put negotiations with Boeing on hold. This is hurting Boeing and U.S. jobs.”
A spokesperson for Norwegian told The Hill that the company is still hoping to win approval from the transportation department.
“It is now more than a year and a half since our we submitted our application and it should have been approved a long time ago,” Norwegian Air spokeswoman Lasse Sandaker-Nielsen said in a email. “Norwegian Air International fulfills all the requirements in the Open Skies Agreement.”
The fight over Norwegian Air’s open skies bid captivated the U.S. aviation industry for the better part of a year before the Transportation Department went quiet on the issue this year.
Norwegian Air currently flies to airports in New York, California and Florida under the banner of its parent company, Norwegian Air Shuttle. But the company says the model for its low-cost subsidiary that would offer the cheaper transatlantic flights, Norwegian Air International, requires access to more open skies airports in Europe to provide more route flexibility.
The AFL-CIO’s Wytkind and other labor leaders have said the Norwegian airline would only be able to offer lower international fares than U.S. airlines by cutting corners on labor standards.
Kjos told the Airways News that he “didn’t even know the labor rules in Ireland” before the open skies dust-up began.
Wytkind, however, said Norwegian Air’s open skies bid is a blatant attempt to skirt international labor agreements.
“The CEO of Norwegian Air is desperately clinging to his business plan although it isn’t finding much support,” Wytkind said.
“Their approach has basically been ‘trust us,’ and it is clear that a lot of people don’t,” he said.
Consumer groups have argued that the Norwegian Air application should be approved because mergers among U.S. airlines in recent years have greatly reduced competition in the nation’s aviation industry.
“DOT has created the problem of too much consolidation across the Atlantic — three alliances control something like 80 percent of the traffic,” Travelers United Chairman Charlie Loecha said in an email. “Now DOT is adding insult to injury by stopping low cost competition that can work in the consumers interest. Airline influence seems to run very deep at DOT. If they were simply following the rules rather than creating new obstacles, this would have been approved months ago.”