Rules for Norwegian Air in dispute over US-Europe flights

DALLAS / AP

Norwegian Air Shuttle has won preliminary approval to expand flying between the US and Europe using an Irish subsidiary.
The decision by the US Department of Transportation was a setback for the major US airlines and their labour unions, who said the subsidiary will be an unfair, low-wage competitor on key trans-Atlantic routes.
The decision followed intense lobbying and public-relations campaigns by both sides and an unusually long review — more than two years — by regulators.
The Transportation Department said that it will take public comments before issuing a final order that could allow the Norwegian subsidiary to begin flying to
the US.
Norwegian, a low-fare, no-frills airline, called the decision a victory for consumers and said it intended to hire US-based crews.
Bjorn Kjos, CEO of Norwegian Group, said final approval for the US flights “will be win-win for consumers and the economy on both sides of the Atlantic.” He said Norwegian would create “thousands” of jobs and help the economies of its US destinations.
US airline unions immediately criticised the decision. Tim Canoll, president of the Air Line Pilots Association, called it “an affront to fair competition.” Sara Nelson, president of the Association of Flight Attendants, said the Obama administration “has chosen foreign corporations over workers’ rights and good American jobs.”
American carriers and their unions had argued that Norwegian decided to expand US service using an Irish subsidiary because Ireland’s tax and labor laws are weaker than those in the US. They said Norwegian would gain an unfair advantage and undercut the American carriers on fares.
American Airlines, Delta Air Lines and United Airlines all declined to comment Friday. All three operate flights across the Atlantic and have European partners that do the same.
The Norwegian subsidiary plans to fly between Boston and Cork, Ireland. The short-term effect of Friday’s ruling would appear limited, but the big U.S. airlines could eventually face more competition as Norwegian and other low-fare rivals add routes and flights in the lucrative trans-Atlantic market.
In its preliminary ruling to grant a foreign carrier permit to Norwegian Air International, the Transportation Department said it saw no evidence that the Irish subsidiary would violate labor terms in a so-called open-skies aviation treaty between the United States and the European Union.