NAS US license battle continues
Further questions about Norwegian Air Shuttle’s US expansion
Michael Sandelson & Sarah Bostock
Six unions have voiced their opposition to the low-cost carrier’s latest plans.
Norway-registered parent company Norwegian Air Shuttle (NAS) has several subsidiaries. One of them is Norwegian Air International (NAI), registered in Ireland.
This firm, which operates Ireland-registered Boeing 787 Dreamliners to America, wishes to employ rights afforded by the transatlantic EU-US Open Skies Agreement (also known as the Air Transport Agreement (ATA)). Irish authorities have issued NAI with an Irish Air Operator’s Certificate (AOC), and the airline has lodged an application with the U.S. Department of Transport (DoT) in order to be able to enjoy the same ATA regulations as EU and American airlines do via their subsidiary.
Unions in Norway and America, U.S. airlines, and U.S. senators, vehemently oppose this move, however. U.S. politicians passed an amendment in 2014, blocking Norwegian’s bid for a foreign carrier permit.
Labor organization officials allege that crews flying on NAI’s planes avoid Norway’s strong labor protections, tax laws, and regulations. This is because personnel are employed via staffing agencies in Asia according to local laws.
Consequently, their working conditions and pay are inferior to those of their colleagues employed directly by Norwegian Air Shuttle or its subsidiaries, the unions argue. The airline has termed these allegations regarding their U.S. market attempt as “slanderous.”
The outcome of NAI’s application is still pending, and Norwegian has established another company called Norwegian Air UK Limited, which unions abbreviate to NAUK.
Six unions—the Air Line Pilots Association (ALPA), Transportation Trades Department, AFL-CIO (TTD), Transport Workers Union of America, AFL-CIO (TWU), Association of Flight Attendants-CWA (AFA-CWA), International Association of Machinist and Aerospace Workers (IAM), and European Cockpit Association—have now sent a joint answer to the DoT regarding NAUK’s application. Opposing it, they urge government officials to “request additional information from NAUK about its employment and business models.”
“While the application is scarce on details, this is a continuation of Norwegian’s efforts to introduce a flag of convenience airline into the transatlantic marketplace,” stated Ed Wytkind, Head of AFL-CIO (TTD) in an email.
Moreover, unions declare that NAUK’s application contains no information about employment arrangements that will apply to the pilots and flight attendants who will serve the U.S.: “NAUK may plan to hire those pilots and flight attendants directly; it may plan to contract them from a UK hiring agency; or it may plan to contract them from non-EU hiring companies that employ the pilots and flight attendants on extra-European contracts, as it is currently done by Norwegian and NAI,” they highlight, calling the situation an “ambiguity.”
Stuart Buss, Head of Communications UK at Norwegian Air Shuttle, comments about the six unions’ opposition regarding Norwegian Air UK’s (NAUK) application to the U.S. Department of Transport (DoT).In an email to The Foreigner, he writes that “all current and future employees in our operation at UK bases will have contracts governed by UK employment law. Norwegian already has major operations and a large route network from UK airports, together with a large base of more than 400 pilots and crew at London Gatwick so we look forward to the DoT’s consideration of the UK application,” says Buss.
Norwegian was hit by industrial action in 2015 regarding pilots’ terms of employment. Norwegian Pilots Union (NPU) pilots were employed through subsidiary Norwegian Air Norway (NAN) instead of Norway-registered Norwegian Air Shuttle. They were dissatisfied about this and demanded a “real employer” as part of their dispute.
“The industrial action was about pilots wishing to be employed by the holding company Norwegian Air Shuttle. The pilots were and are still employed by companies in the Norwegian Group,” Buss explains.
At the end of 2015, Norwegian Air Resources Holding (NARH), a fully-owned subsidiary part of the Norwegian group of companies, registered in Dublin, announced that it had acquired 50 percent of OSM Aviation. OSM Aviation currently employs over 1,000 Norwegian crew members in Sweden, Finland, the UK, Spain, and the U.S. Three OSM companies are registered in Norway.
NARH and OSM Aviation plan to acquire a 49 percent stake in Norwegian’s companies in Spain, Finland, and the UK once the transaction is closed. According to the airline, employment conditions for pilots and cabin crew remain unchanged.
Closing of the NARH-OSM agreement is subject to approval by The European Commission under the EU Merger Regulation.
It also appeared in the Jan. 15, 2016, issue of the Norwegian American Weekly.