[As published by David Groves in The Stand]
Multinational corporations are increasingly contracting out what used to be family-wage company jobs to staffing companies to avoid unionization and gain a competitive advantage by paying substandard wages and benefits. The Association of Flight Attendants-CWA, the Air Line Pilots Association and other aviation unions are calling attention to an international airline’s scheme to do this by labor law shopping and registering under another nation’s “flag of convenience” to contract out their pilots and cabin crew jobs, a move that threatens the U.S. airline industry and the jobs it supports.
Norwegian Air International (NAI), the third largest low-cost carrier in Europe, is seeking to operate as an Irish airline and has applied for an Irish Air Operator’s Certificate. It appears that NAI plans for its pilots and cabin crew to work under individual employment contracts with wages and working conditions substantially less than those of the company’s Norway‐based crews. The contracts will be with employment companies that will “rent” the crew to NAI. Although it seeks to become an Irish airline, it appears that NAI will not be operating air transportation services from Ireland, raising a question about how regulatory oversight of NAI’s operations will be conducted.
If NAI succeeds in labor law shopping — choosing where it does business based on an advantageous legal or regulatory environment — the company will wield an enormous unfair economic advantage over U.S. airlines, making it more difficult for U.S. airlines and their employees to compete for long‐haul international passengers’ business. The result threatens the U.S. airline industry and the tens of thousands of jobs it supports, as well as its contribution to U.S. national security and to the U.S. economy.
NAI has applied with the U.S. Department of Transportation for a Foreign Air Carrier Permit, which would allow it to fly to the United States. U.S. Sens. Brian Schatz (D-HI) and Sen. Roy Blunt (R-MO) have circulated a letter to DOT Secretary Anthony Foxx in opposition to NAI’s request for the permit. Both Sens. Maria Cantwell (D-WA) and Patty Murray (D-WA) have signed on to the letter. Cantwell, who chairs the Aviation subcommittee, will host a hearing Thursday on airline competitiveness at which Ed Wytkind of the AFL-CIO Transportation Trades Department will be testifying and exposing this NAI scheme.
BACKGROUND — This “flag of convenience” business practice has undermined the U.S. maritime industry by allowing a vessel to be registered in a country different from its ownership and apply the country of registry’s laws to its operations.
Not only is NAI’s application not in the public interest, it conflicts both with the terms of the U.S. aviation statutes and the U.S. air services agreement with the EU. Under the U.S. Code, the U.S. Department of Transportation is charged with encouraging “fair wages and working conditions” and “strengthening the competitive position of [U.S.] air carriers to at least ensure equality with foreign air carriers.” NAI’s business scheme does not allow U.S carriers equal competition, therefore the application should be rejected.
The U.S.‐EU air transport agreement makes clear that the opportunities made available under the agreement are not to be used to reduce labor standards. NAI’s business model is clearly designed to reduce labor standards. It is clear that NAI’s effort to avoid Norwegian labor laws is therefore inconsistent with of the U.S.‐EU air transport agreement.