House panel votes to clip wings of future airline deals like Norwegian

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House panel votes to clip wings of future airline deals like Norwegian


Category: Airline / Travel

The low-cost carrier Norwegian Air International might not have won approval to serve the U.S. under legislation a House panel approved Tuesday.

The House Transportation and Infrastructure Committee agreed by voice vote to add a provision dealing with foreign airlines to a bill governing the Federal Aviation Administration.

The provision allows the secretary of transportation to block foreign airlines from serving the U.S. after finding a carrier would erode labor standards because it was established in a country other than its majority owners to avoid regulations of the home country.

Rep. Frank LoBiondo, R-N.J., sponsored the provision with the top Democrat on the panel, Rep. Peter DeFazio of Oregon. LoBiondo said the provision “would fix a terrible decision made by the Obama administration” by approving Norwegian flights to the U.S.

The Transportation Department approved Norwegian’s application in December after an unusual three-year review. The department called the case “among the most novel and complex ever undertaken,” but found that there was nothing to prevent approval of Norwegian under transport agreements with Norway and Europe.

But pilots and flight attendants – joined by lawmakers in both parties – complained that Norwegian ignited a “race to the bottom” for regulations and wages by incorporating in Ireland with the prospect of hiring less-expensive crews in Singapore.\

“Now any airline can set up under a flag of convenience to exploit weak labor laws in other countries, save money and undercut competition,” DeFazio said in introducing the legislation to block similar deals in the future.

Capt. Tim Canoll, president of the Air Line Pilots Association, said the provision would clarify longstanding policy that could potentially disqualify airlines from serving the U.S.

“The measure defends U.S. aviation workers against foreign carriers’ shopping the globe for cheap labor while upholding the letter and spirit of our Open Skies agreement with the European Union,” Canoll said.

Norwegian has strongly objected to being characterized as cutting corners on safety or labor regulations. The airline contends it will benefit economies on both sides of the Atlantic by ordering $18.5 billion of Boeing aircraft and hiring hundreds of U.S. workers.

Norwegian fully complies with all transportation pacts between the U.S. and Europe that are called Open Skies agreements, and with all U.S. laws and regulations, spokesman Anders Lindstrom said after committee vote.

The legislative language approved Tuesday wouldn’t affect Norwegian’s existing flights or plans for expanded flights to bring travelers world-class service and lower fares, Lindstrom said.

“At a time when U.S. airline job growth continues to rise and U.S. carriers are generating record profits, the language appears to be yet another attempt by special interests to evade healthy competition and raise costly procedural hurdles to new entrants in international markets — all to the detriment of consumers, communities, aerospace manufacturers, and the travel and tourism sector,” Lindstrom said.

An official with the U.S. Travel Association, a group that advocates for hotels and destination resorts in addition to airlines, voiced disappointment with the provision for hindering affordable travel.

“Currently, very few of these carriers serve the U.S., and this amendment limits the ability of any new competitors to establish direct international flights here,” said Jonathan Grella, the association’s executive vice president for public affairs. “This amendment directly undermines our country’s Open Skies agreements, and risks millions of American jobs by hampering efforts to make our aviation market more competitive and give flyers more choices.”

Some airports have welcomed Norwegian’s shiny new planes and some airlines have welcomed the chance to connect with more passengers to and from Europe.

Sean Spicer, the White House spokesman, said in February that Norwegian hiring hundreds of U.S. crew members and buying Boeing planes is “a huge economic interest” for the country.

But Norwegian’s approval remains hotly disputed. Besides the legislative effort, unions are appealing the department’s approval of Norwegian.

Source: USA Today