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TTD and European Transport Workers’ Federation Oppose NAI’s Bid for Exemption

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Application of                                                     
Docket No. OST-2013-0204                               

for an exemption under 49 U.S.C. § 40109        
and a foreign air carrier permit pursuant to 
49 U.S.C. § 41301 (US-EU Open Skies


The European Transport Workers’ Federation (ETF), is a labor organization consisting of trade unions in the transportation industry from the European Union, the European Economic Area and Central and Eastern European countries. ETF represents more than 2.5 million transport workers, among them more than 250,000 civil aviation employees. The Transportation Trades Department (TTD) is a U.S.-based national labor organization under the umbrella of the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), representing several million transport workers through its 32 member unions. Specifically, TTD’s private sector aviation unions represent the vast majority of employees at U.S. airlines that would be in direct competition with NAI for international routes.

The ETF and TTD join in this submission to express our serious objections and concerns outlined below. As indicated, in addition to the submissions we have made separately regarding the severe negative impacts that this matter will have on fair competition, jobs and labor rights, we have deep and profound concerns that the business model being pursued by Norwegian Air International (NAI) raises significant security concerns. Among other things, we believe that critical policies and regulations adopted following the terrorist attacks of September 11, 2001, by the U.S. and EU to ensure the safety of its citizens could be at risk.

At the outset, it should be noted that the position expressed by officials from the Directorate General for Mobility and Transport (DG MOVE) during its meeting with the U.S. Department of Transportation and the Department of State on July 14, 2014, on the legal meaning and applicability of article 17 bis of the EU-U.S. agreement while considering the exemption and a foreign air carrier permit for NAI raise serious concerns. While we welcome the request by the U.S. government to DG MOVE to submit its position on the meaning and the applicability of article 17 bis “Social dimension,” we vehemently disagree with the opinions given by DG MOVE during the meeting.

Our general and specific objections to the explanation provided by DG MOVE as referenced include the following:

1) DG MOVE does not represent the views of all the European signatories of the EU-US Air Transport Agreement (ATA)

The European Commission does not have the mandate or the authority to represent the views of all the signatory member states to the ATA. During the meeting of the European Consultative Forum on 23 July 2014, several stakeholders including industry and union representatives raised questions and concerns to the European Commission regarding the business model of NAI. Several member states have indicated their support for the position outlined by these stakeholders. Some of them have expressed in writing their concerns about DG MOVE’s support of NAI’s practices.

2) Article 4 c)

NAI’s interpretation of Article 4 (Authorisation) of the ATA is deeply flawed. Article 4 reads in part:

“On receipt of applications from an airline of one Party, in the form and manner prescribed for operating authorisations and technical permissions, the other Party shall grant appropriate authorisations and permissions with minimum procedural delay, provided: […]
(c) the airline is qualified to meet the conditions prescribed under the laws and regulations normally applied to the operation of international air transportation by the Party considering the application or applications.”

The tortured language construction offered by NAI, taking special note that NAI is established in Ireland without having any substantial activity in this country, facilitates social dumping , notably by employing aircrew based outside of the EU with the aim to circumvent EU member states’ legislation on social security, taxes and labour, as well as collective agreements. That this activity somehow meets the standards for receipt of operating authorizations set out in Article 4 defies common sense and must be rejected.

Further, if NAI’s business model is allowed to operate in the trans-Atlantic marketplace it would render Article 17 bis meaningless. Article 17 bis, provides: “The parties recognize the importance of the social dimension of the Agreement and the benefits that arise when open markets are accompanied by high labour standards. […]”. NAI’s proposed business is premised on an employment model that intentionally avoids the labor standards currently enjoyed by U.S. and European air crews. This is inconsistent with Article 17 bis and contrary to any acceptable notion of “high labour standards.” As such, it is unsurprising that NAI’s interpretation of the Agreement would nullify any implementation or application of the Article.

We understand that aircrew members allegedly based in Thailand spend substantial time flying to and from Europe and within Europe. Their activity raises serious concerns that NAI may be using its crew’s unique situation to circumvent current labour law, social law and collective agreements applicable to aircrew governed by individual EU member states’ statutes, regulations and policies. Regulations 593/2008/EC and 465/2008/EC clearly provide that the law of the member state where the worker habitually carries out his/her duties is applicable. In our opinion, this circumvention of the European legislation undermines labor standards. In addition, it is our understanding that none of NAS experienced and unionized staff have been offered to fly on NAI aircraft. We also understand that the company has preferred to hire non-unionized staff, which also may be in contravention of European policies and legislation.

We also question NAI’s attempts to satisfy provisions concerning “principal place of business” as defined in the ATA, because the principal financial functions and operational control are not exercised from Ireland. Based on the fact that the International Confederation of Trade Unions together with Irish trade unions IMPACT and ALPA have submitted a formal complaint on 4 May 2010 to the International Labor Organization for breach of ILO Convention No. 98 Right to Organize and Collective Bargaining, we also think that Ireland could be described as a country of “flag of convenience.”

3) Interpretation of Article 17 bis of the ATA

Article 17 bis cannot be interpreted in a way that would allow the undermining of labour rights and standards in any way. It is binding and has the same legal strength as other articles of the ATA, namely articles 3 and 4. In terms of paragraph one, the second sentence (“The opportunities created by the agreement are not intended to undermine labour standards or the labour-related rights and principles contained in the Parties’ respective laws”) should be interpreted as “shall not undermine,” i.e. as a mandatory clause. The second part of the sentence relates to “Parties’ respective laws” which is a clear indication to the different jurisdictions of the United States and individual EU member states. Therefore, we cannot accept the Commission’s conclusion that this article can only be assessed jointly. In our opinion, the U.S. is entitled to assess it alone. However, this does not prevent exchanges during EU-U.S. Joint Committee meetings.

4) Safety issues (ATA Articles 4 d) & 8)

According to article 4 d), one of the preconditions to receive authorization is that “the provisions set forth in Article 8 (Safety)[…] are being maintained and administered.” Despite the fact that the Irish Department of Transport dismissed any concerns regarding safety in its letter dated 30 July 2014, we still believe that there are outstanding issues that should be addressed. This belief is strengthened by the declaration of Captain S. Colman to the DOT (ex-Norwegian Air captain) dated 22 July 2014 that has been submitted to your department (see attachment). In this declaration, he illustrated the complicated nature of his relation with NAS/NAI, as well as difficulties when submitting (mandatory) flight safety reports and the retaliatory actions from management. We wonder whether European civil aviation legislation provides sufficient safety guarantees for aircrews based outside of the EU or the U.S. The same is valid for self-employed, such as NAI cabin crew hired through a hiring agency “Adecco” and based in Thailand or flight crew working on individual employment contracts with a Singaporean hiring agency.

5) Security issues (ATA Articles 4 d) & 9)

In addition to the aforementioned, it is imperative that our serious concerns over U.S. and European Security are addressed.

Following the tragic September 11, 2001, terrorist attacks, new security measures were put in place including extensive background checks of aircrew. Given the ever-increasing sophistication of new threats we are mindful of any attempts, intentionally or unintentionally, to undermine much needed security measures to protect air crews, the flying public, communities, the industry and, of course, U.S. and European international, national and regional security. In this vein, we have sincere concerns that Thailand-based cabin crews hired through a hiring agency “Adecco” as utilized by NAI (established in Ireland) guarantee the same level of background checks that exist for European and U.S-based aircrews. The seriousness of this concern on the overall high level of security of operations between the USA and Europe cannot be overstated. In addition, this phenomenon can potentially spread to other regions of the world.

6) Retaliatory Measures and Dispute Resolution

Finally, we would like to address the irresponsible claims made by some – most recently in comments filed by the Washington Airports Task Force (WATF) – that the denial of NAI’s application by DOT could “potentially invite retaliation and a trade war.” This is nothing more than fear mongering, and ignores the dispute resolution and arbitration mechanisms built into the Agreement, most notably Article 18. According to the August 4 Notice, DG MOVE even referenced Article 18 as a mechanism for resolving concerns or disagreements between parties over how the Agreement is implemented. Retaliatory measures are a last resort that could come about if differences between parties cannot be resolved through the appropriate consultation and adjudication measures. To suggest that retaliatory actions could result from a decision (as yet not made) by one party before any formal consultation or adjudication process has begun is a threat that undermines the terms of the agreement as were negotiated in good faith between the U.S. and EU.

Respectfully submitted,

Eduardo Chagas, General Secretary
European Transport Workers’ Federation
Rue du Marché aux Herbes, 105 (bte 11)
1000 Brussels

Edward Wytkind, President
Transportation Trades Department, AFL-CIO
815 16th Street, NW
Washington, DC 20006
Phone: 202-628-9262
Fax: 202-628-0391

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