DOT is out with a tentative show cause order this morning approving the carriers 2013 foreign air carrier permit.

The department determined that despite significant opposition to the carriers application, it had found no legal basis to deny the application or support the arguments of the opponents.

Department found that the requested authority is permitted under the U.S.-European Union-Norway-Iceland Air Transport Agreement of 2011 based on the airlines Irish Air Operator Certification.

The tentative finding becomes final in 21-days unless objections (which there will be undoubtedly) are received.


OST-2013-0204

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Bravo. About time   

I wonder how this bodes for similar protectionist efforts underway?

Is there any information on why it took so long?

Quoting bobdino (Reply 2): Is there any information on why it took so long?

Its politics.

When the 3 major airlines, most labor unions, and half of Congress opposed the application, the simplest thing for DOT was to sit on it. This case was toxic with all outcomes having negative repercussions.

Very good, though it seems Norwegian has adjusted well without this permission and continued to grow its USA flights regardless.

Quoting LAXintl (Reply 3): When the 3 major airlines, most labor unions, and half of Congress opposed the application, the simplest thing for DOT was to sit on it. This case was toxic with all outcomes having negative repercussions.

I suppose the bit I'm missing is "why did sitting on it for 3 years make approving an application you can't deny less painful"? This is probably just my lack of understanding of US politics...

Long over do!

Flyguy

This is too bad. Hopefully the DOT will assure they don't engage in social dumping.

I expect the ORK flights to be announced for this summer next week with this announcement.

Quoting mercure1 (Reply 4): Very good, though it seems Norwegian has adjusted well without this permission and continued to grow its USA flights regardless.

How long is the contract between the airline and the staffing agency that employs the US-based crew members good until? With this ruling, I wouldn't be surprised at all to see all of the US-based crew let go and replaced on the rotations by the Philippines-based crew members. The Irish AOC is all about lower cost, so it can be expected that they will go with their lowest cost crew members as well.

Quoting bobdino (Reply 5): I suppose the bit I'm missing is "why did sitting on it for 3 years make approving an application you can't deny less painful"? This is probably just my lack of understanding of US politics...

Americans (conservatives) love preaching free market economics but only as long as they are the dominant side. If it's a foreign company looking to do business in America they suddenly turn protectionist.

Quoting N1120A (Reply 7): This is too bad. Hopefully the DOT will assure they don't engage in social dumping.

Just as pilot salaries were finally beginning to go back up, now Norwegian steps in with the idea to just outsource the whole thing.

Quoting usflyguy (Reply 9): How long is the contract between the airline and the staffing agency that employs the US-based crew members good until? With this ruling, I wouldn't be surprised at all to see all of the US-based crew let go and replaced on the rotations by the Philippines-based crew members. The Irish AOC is all about lower cost, so it can be expected that they will go with their lowest cost crew members as well.

   It's the maritime industry all over again.

Quoting LAXintl (Thread starter): Department found that the requested authority is permitted under the U.S.-European Union-Norway-Iceland Air Transport Agreement of 2011 based on the airlines Irish Air Operator Certification.

A great day for Irish consumers, the beginning of transatlantic flights from ORK.

A sad day for all aviation workers (with dignity) everywhere..

Quoting OB1504 (Reply 11):    It's the maritime industry all over again.

Exactly, this never should have been allowed to happen. Flag of convenience.

-DiamondFlyer

Quoting 321neo (Reply 12): A great day for Irish consumers, the beginning of transatlantic flights from ORK

Oh yeah, cause this is all about flying to/from Ireland. Ireland isn't going to benefit much at all from this. Maybe an odd flight here and there. The larger prize is the rest of Europe.

Quoting N1120A (Reply 7): This is too bad. Hopefully the DOT will assure they don't engage in social dumping.

Quoting santi319 (Reply 13): A sad day for all aviation workers (with dignity) everywhere..

Social dumping or sad day?

Why the stink when a European airline can manage lower cost?

There are many dozen airlines that service the U.S. with labor cost fraction of the US rates. Be it Philippines, El Salvador, Brazil, Russia, Turkey, UAE, Mexico, Poland, India, China etc.

Are we to blame all the airlines from these nations also that manage lower staff cost then their expensive U.S counterparts?

Like many things air transport is a global market with producers of products with varying situations.

If anything, U.S airlines need to become more efficient and look at their own cost then blame other companies and nations for the environment that exist outside the USA.
Any failure to somehow to compete is not the fault of outside parties, but fully the fault of the U.S companies themselves.

Quoting santi319 (Reply 13): Exactly, this never should have been allowed to happen. Flag of convenience.

It was always going to be approved since there is no legal basis to have rejected the application. If it weren't for the lobbying of US carriers with legacy issues and their miserable unions there would have been no delay.

It's exciting news for ORK and SNN airport, with ORK-BOS flights likely to begin as originally scheduled this summer, ORK-JFK and SNN-BOS/JFK likely to operate from 2017.

Quoting santi319 (Reply 13): A sad day for all aviation workers (with dignity) everywhere..

Is this making the assumption that the workers at the trash US legacies have dignity? lol

[Edited 2016-04-15 10:30:11]

I simply do not understand this debate over labor cost.

There is hardly any global requirement that everyone get paid the same and every company must have the same cost base. Even in the U.S there is large divergence of cost among air carriers.

Finger pointing at Norwegian was hardly appropriate when every company and nation on the planet has their own local laws and economic environment.

If U.S airlines want to cry about cost they should go out and complain about likes of Avianca, Philippine Airlines, China Eastern, Turkish, Ethiopian, TAM, Hainan, Volaris, LOT, etc all that have a fraction of the cost base and compete against U.S airlines.

Quoting OB1504 (Reply 11): Just as pilot salaries were finally beginning to go back up, now Norwegian steps in with the idea to just outsource the whole thing.

I have been lectured that this is the beauty of the free market. Have I been lied to?

Quoting 321neo (Reply 17):

I mean, I have dignity... Should I not?

Sad day indeed. So glad I'm getting close to retiring from a US major after 35 years of flying. It won't be long before they're all registered as Irish, Liberian, Ghananian flag carriers and hire the cheapest possible foreign crews. Just like when you call customer service, you invariably get someone in India or the Philippines that, while I'm sure they are very nice and are a hard worker, make substantially less than a US worker. Say goodbye to more middle-class jobs in the US.

Honestly the only issue for me is Norwegian using cheap Thai crew.

Do they still do that?

Quoting 321neo (Reply 17):

Have we seen an indication from Norwegian that they would now be ready to launch ORK-BOS this summer? If all goes right (and that's not sure), they will not get confirmation until mid-May. That seems very late to start selling seats, even if flights only begin in July/August. If anything, such a late launch might damage the route's chance of success and that would be a real shame.

Quoting mercure1 (Reply 16): There are many dozen airlines that service the U.S. with labor cost fraction of the US rates. Be it Philippines, El Salvador, Brazil, Russia, Turkey, UAE, Mexico, Poland, India, China etc.

A call center isn't the same as the operation of aircraft between two points.

Quoting thekorean (Reply 23): Honestly the only issue for me is Norwegian using cheap Thai crew.

How does nationality matter? Something improper with Thai nationals?

Insert Bulgarian, Turkish, Russian, Indian, Chinese, Mexican or even American crew in same sentence, what is the difference?

Quoting N1120A (Reply 25): A call center isn't the same as the operation of aircraft between two points.

   

Airlines in Philippines, El Salvador, Brazil, Russia, Turkey, UAE, Mexico, Poland, India, China etc all operate services to the USA.

So because local wages, operating cost or laws allow lower cost base in these nations, that is somehow bad?

" In the show cause order, DOT acknowledged that the labor-related concerns raised by NAI’s opponents warranted proceeding with caution and careful consideration. Given the importance of the arguments raised, especially those about the legal effect of the labor provision of the U.S.-EU Agreement, the Department went to great lengths to give full consideration to such issues. In addition to the Department’s Office of the General Counsel performing its own international law analysis, DOT took the unprecedented step of formally consulting two agencies with special expertise on international law, the Department of Justice’s Office of Legal Counsel (OLC) and the Department of State (DOS), to solicit their views.

DOT’s show cause order states that, based on the record as a whole, as well as its consultations with the Departments of Justice and State, the provision in the U.S.-EU Agreement that addresses labor does not afford a basis for rejecting an applicant that is otherwise qualified to receive a permit. In this regard, the order states that NAI appears to meet DOT’s normal standards for award of a permit and that there appears to be no legal basis to deny NAI’s application. "

Read more here:

http://www.transportation.gov/briefi...ga=1.38887777.316957430.1439399729

From a forum full of amateur CEOs who would love nothing more than to rip off as many workers as possible, I'm stunned at this response.

Quoting mercure1 (Reply 26): So because local wages, operating cost or laws allow lower cost base in these nations, that is somehow bad?

.

Quoting mercure1 (Reply 26): How does nationality matter?

Traditionally, nationality does matter and crews belong to either the origin country or the destination country. If we are free to hire a global workforce for all transborder flying, then intl flight crews from the US, Canada, Mexico, Europe should all be laid off in favor of Thai or MNL based crews. As it is in the shipping industry.

Quoting Flighty (Reply 29): Traditionally, nationality does matter and crews belong to either the origin country or the destination country. If we are free to hire a global workforce for all transborder flying, then intl flight crews from the US, Canada, Mexico, Europe should all be laid off in favor of Thai or MNL based crews. As it is in the shipping industry.

Just because the US has fenced in labor market (which hurts the U.S. imo in many sectors), lets not blame other nations that allow more free flow of labor in various industries.

Frankly in a globalized world, there should be more liberal flow of capital and labor and we forget old world and rigid concepts of strict nationality.

Quoting Flighty (Reply 29): Traditionally, nationality does matter and crews belong to either the origin country or the destination country. If we are free to hire a global workforce for all transborder flying, then intl flight crews from the US, Canada, Mexico, Europe should all be laid off in favor of Thai or MNL based crews. As it is in the shipping industry.

How about if Norwegian decided to employ all Bulgarian or Cypriot crews? Still very much part of the EU, but at fraction of Northern European cost.

At the end of the day, Norwegian is not breaking any laws in its home, so I am not sure why the US has any argument.

Similar I cannot see Europe complain if US airlines opted to employ Mexican crews for its airlines. That would be up to U.S. to decide not the EU.

Quoting B747400ERF (Reply 10):

Quoting B747400ERF (Reply 10): Americans (conservatives) love preaching free market economics but only as long as they are the dominant side. If it's a foreign company looking to do business in America they suddenly turn protectionist.

I'm shocked hearing this from you 

Quoting LAXintl (Reply 18): There is hardly any global requirement that everyone get paid the same and every company must have the same cost base. Even in the U.S there is large divergence of cost among air carriers.

Not at all, but when you go chasing the globe for the cheapest labor to operate a business between two countries that are more developed with much higher costs of living, there is an issue.

Quoting LAXintl (Reply 18): If U.S airlines want to cry about cost they should go out and complain about likes of Avianca, Philippine Airlines, China Eastern, Turkish, Ethiopian, TAM, Hainan, Volaris, LOT, etc all that have a fraction of the cost base and compete against U.S airlines.

Except they are offering to or from their country of origin. For the most part, it is not an airline running flights from the US to a second country, employing third world employees that will work at a rate 80% of a livable wage in the US. If NAI was employing only Norwegians, that would be perfect! Actually, is NAI employing any Norwegians?

Quoting mercure1 (Reply 26): Airlines in Philippines, El Salvador, Brazil, Russia, Turkey, UAE, Mexico, Poland, India, China etc all operate services to the USA.

From their countries of origin. The cost of living in those countries isn't the same as it is in the US either. UAE probably shouldn't be included since they make untaxed wages and are provided goods by their government in addition to their salaries.

Quoting HiflyerAS (Reply 22): Sad day indeed. So glad I'm getting close to retiring from a US major after 35 years of flying. It won't be long before they're all registered as Irish, Liberian, Ghananian flag carriers and hire the cheapest possible foreign crews. Just like when you call customer service, you invariably get someone in India or the Philippines that, while I'm sure they are very nice and are a hard worker, make substantially less than a US worker. Say goodbye to more middle-class jobs in the US.

No need to be quite so glum. There are plenty of consumers (me included) that would not fly an airline that does business in a way that endangers safety. US legacies are very reliable on maintenance and pilot skills. Outside of US majors, I avoid several other airlines that have shown a propensity to cut corners. There's no way I am flying Norwegian unless I know their pilots are just as skilled on average as UA/DL/AA pilots. And that simply won't be the case...

Quoting usflyguy (Reply 33): Not at all, but when you go chasing the globe for the cheapest labor to operate a business between two countries that are more developed with much higher costs of living, there is an issue.

Aviation at the end of the day is a commodity business, so its no different that producing a car, TV or other product.
Its only natural a producer to seek manage its cost best, be it labor or anything else.

So long as Norwegian is compliant with its home country laws or EU law in this case its free to conduct business as an Irish company.

If the US airlines are so afraid of this little airline and any perceived advantage they feel it might have, maybe they should put their effort into liberalizing the U.S. labor and capital markets so they may employ similar methods.

Quoting usflyguy (Reply 33): Except they are offering to or from their country of origin. For the most part, it is not an airline running flights from the US to a second country, employing third world employees that will work at a rate 80% of a livable wage in the US. If NAI was employing only Norwegians, that would be perfect! Actually, is NAI employing any Norwegians?

Norway is part of the EU open-skies market so it indeed only offering service from its home market.
Norwegian is not trying to serve 7th freedom routes like Australia-US, or Brazil-US, but only service between its own market and the US. Even its Caribbean flying is only between EU territories and the U.S.

Quoting usflyguy (Reply 33): From their countries of origin. The cost of living in those countries isn't the same as it is in the US either. UAE probably shouldn't be included since they make untaxed wages and are provided goods by their government in addition to their salaries.

Its pretty normal for foreign airlines to employ foreign crews. One client of mine is EVA, and I recently learned they have a growing cadre of crews from Latin America which surprise surprise come at lower cost than Taiwanese pilot.
Are we going to somehow get mad at EVA and ban it from U.S routes because its looks overseas for lower cost pilots also?

Quoting aaexecplat (Reply 34): I am flying Norwegian unless I know their pilots are just as skilled on average as UA/DL/AA pilots. And that simply won't be the case...

You don't think Irish or EU standards and oversight are adequate?

Quoting usflyguy (Reply 9): How long is the contract between the airline and the staffing agency that employs the US-based crew members good until? With this ruling, I wouldn't be surprised at all to see all of the US-based crew let go and replaced on the rotations by the Philippines-based crew members. The Irish AOC is all about lower cost, so it can be expected that they will go with their lowest cost crew members as well.

I would hope that if they do this the DOT has a means of pulling the approval. Unfortunately, that will lead to a lengthy legal battle, which would have all been unnecessary if the DOT had rejected the application. Norwegian was doing just fine without it and the can of worms did not need to be opened.

Quoting B747400ERF (Reply 10): Americans (conservatives) love preaching free market economics but only as long as they are the dominant side. If it's a foreign company looking to do business in America they suddenly turn protectionist.

Which is, of course, why Norwegian is currently not allowed to fly to the US, and why you'll never see one of their aircraft there.  

Quoting LAXintl (Reply 18): If U.S airlines want to cry about cost they should go out and complain about likes of Avianca, Philippine Airlines, China Eastern, Turkish, Ethiopian, TAM, Hainan, Volaris, LOT, etc all that have a fraction of the cost base and compete against U.S airlines.

All those airlines are not trying to skirt labor laws by opening subsidiaries in other countries which allow them to outsource to still other countries. They have lower costs because of the country in which they operate. That's nothing new.

Quoting mercure1 (Reply 26): How does nationality matter? Something improper with Thai nationals? Insert Bulgarian, Turkish, Russian, Indian, Chinese, Mexican or even American crew in same sentence, what is the difference?

Nothing wrong with the people themselves. But when they're working for an EU carrier, they should be paid according to an EU system. The whole point of Norwegian going for an Irish certificate is that Ireland lets them outsource outside the EU, whereas other countries do not. That's why there was no issue with them having a UK certificate or a Spanish certificate, or of course a Norwegian certificate. The Irish certificate is specifically set up to facilitate social dumping, which is not allowed under the US-EU agreement. But apparently those don't mean things anymore.

-Mir

Quoting Mir (Reply 36): But when they're working for an EU carrier, they should be paid according to an EU system.

Says who? If you've identified a legal oversight which you feel may have been overlooked by the parties involved in this process you ought to let them know!

Quoting LAXintl (Thread starter): Bravo. About time

And you thought the race to the bottom had already ended? Guess again.

Quoting aaexecplat (Reply 34): No need to be quite so glum. There are plenty of consumers (me included) that would not fly an airline that does business in a way that endangers safety. US legacies are very reliable on maintenance and pilot skills. Outside of US majors, I avoid several other airlines that have shown a propensity to cut corners. There's no way I am flying Norwegian unless I know their pilots are just as skilled on average as UA/DL/AA pilots. And that simply won't be the case...

Have you any proof that Norwegian pilots are less trained than your countrymen? Have you any proof that safety will be 'endangered'? Have you any proof that 'other' European airlines cut corners. As for not flying them, they won't miss you.

Quoting mercure1 (Reply 26):

It's pure exploitation. Nothing wrong with foreign crew as long as they are paid equally as locals.

Quoting Mir (Reply 36): they should be paid according to an EU system.

What is EU standard?

EU has 28 nations with extreme differences. For instance cost of living index in place like Bulgaria or Romania is only 1/3 of place like Scandinavia.

At the end I dont think employing crews from 3rd nations is that different than employing someone from a cheaper EU nation, just fact is that Asia has well established crew service companies that one can easily contract with.

Look at all the foreign airlines that employ Chinese crew members or ground support staffing positions via the Chinese government staffing agency. Its a simple single call and voila you have your Chinese cabin crew or ground support.

Quoting LAXintl (Reply 34): maybe they should put their effort into liberalizing the U.S. labor and capital markets so they may employ similar methods.

What a creative way to say that you want to slash flight crew salaries.

Many of you are overlooking two important facts: If American pilots can work for ME3 carriers, why can't pilots from the less expensive parts of Europe or Asia work for Norwegian? What's the difference?

Also, many of you assume there is an endless supply of pilots out there from "cheaper" countries. How do you think people from those areas become pilots? If it is government sponsored, they end up working for their government airlines. Becoming a pilot costs more or less the same around the world and nobody is giving it for free. In fact, so many foreigners come and get their training in the US.

Plenty of folks here championing this decision need to read up on the flag of convenience model and the impact it had on the US maritime industry. I see from posts here that there is a distinct lack of understanding about what this means. This would be disastrous for the thousands of decent paying, middle class jobs that will be lost in the U.S. if this can of worms is opened.

Mark my words, this will not bode well for US pilots or cabin crew. All in the name of a cheaper ticket. You get what you pay for folks. Air travel is already dirt cheap. You don't want it to be even cheaper when this is how that cost is afforded.

Quoting 321neo (Reply 36): Says who?

Says the EU. Remember the trouble Ryanair got into for basing crews in non-Irish countries but then claiming that they were Irish and so they didn't have to contribute to the local benefit system? Same thing is going on here.

Quoting mercure1 (Reply 40): What is EU standard? EU has 28 nations with extreme differences. For instance cost of living index in place like Bulgaria or Romania is only 1/3 of place like Scandinavia.

If they want to hire crews with a Romanian or Bulgarian company, that's fine. At least the EU has oversight there - it's limited, but it exists. They do not have oversight on the employment of people outside the EU, and that creates the potential for problems.

Quoting vs11 (Reply 42): If American pilots can work for ME3 carriers, why can't pilots from the less expensive parts of Europe or Asia work for Norwegian? What's the difference?

When an American works for one of the ME3, they are essentially an immigrant to the relevant country who is working in that country. Nobody has a problem with it because it's really no different from a native of that country working for the airline. But that is not what Norwegian is doing.

None of the crews on Norwegian flights actually work for Norwegian - they work for staffing companies which Norwegian owns and then contracts with (basically doing business with itself) to provide crews for its own flights. That's not in and of itself problematic, but because those staffing companies could be located anywhere - some are currently in Singapore and Thailand - Norwegian is able to claim that their crews, who definitely work in the EU, are not actually working in the EU, and thus avoid compensating them as if they were working in the EU (in terms of both salary and benefits - the benefits are more of an issue here).

That would be like Emirates, rather than employing its crews in Dubai as it does now, deciding that it will hire American crews, base them in Dubai, but hire them through a subsidiary company in Yemen, and thus pay them as if they were employed in Yemen when they never work in Yemen and are clearly employed in Dubai. Or like a US carrier deciding that it will hire its crews through a company in the Cayman Islands, and claim that they are not employed in the US despite being based in the US. The difference should be immediately obvious.

-Mir

Quoting LAXintl (Reply 34): Its only natural a producer to seek manage its cost best, be it labor or anything else. So long as Norwegian is compliant with its home country laws or EU law in this case its free to conduct business as an Irish company.

The entire idea behind this flag of convenience model is to circumvent EU laws. The crews would not be subject to them. At all. They'd be cheap and free to abuse, and if you think this model won't spread like wildfire, you're sorely mistaken. This isn't about US airlines being afraid of fair competition, it's about protecting US jobs that will inevitably disappear as a result of this business model. Norwegian as it stands now, with Norwegian/European crews working under European regulations for fair pay is fine. Allowing the flag of convenience model is allowing the snake in the grass right into your home.

Quoting aaexecplat (Reply 33): There's no way I am flying Norwegian unless I know their pilots are just as skilled on average as UA/DL/AA pilots. And that simply won't be the case...

Oh please, grow up will you ? There is no proof that US pilots are any better than pilots from other nations.

Quoting usflyguy (Reply 32): Except they are offering to or from their country of origin. For the most part, it is not an airline running flights from the US to a second country, employing third world employees that will work at a rate 80% of a livable wage in the US. If NAI was employing only Norwegians, that would be perfect! Actually, is NAI employing any Norwegians?

So the US and British crews that Norwegian employs are third world crews ? Really ?

Quoting futureualpilot (Reply 45): Allowing the flag of convenience model is allowing the snake in the grass right into your home.

Norwegian is not going to operate domestic US flights so not sure what "home" you are referring to. As to international flights, it has been pointed out by others earlier in the thread , that lower costs airlines already operate to the US.

Quoting futureualpilot (Reply 43): You don't want it to be even cheaper when this is how that cost is afforded.

Oh yeah, they sure do. Sadly, until there's some sort of catastrophe, nobody cares - they just want it as cheaply as they can get it, regardless of what that means.

Quoting Mortyman (Reply 46): So the US and British crews that Norwegian employs are third world crews ? Really ?

It's the nationality of employer that's the issue, not the nationality of the employee.

-Mir