Setting the record straight about Norwegian Air, Open Skies pact

(June 29, 2016) — Expanding global connectivity through aviation only succeeds when the playing field is level and the rules are both universally understood and scrupulously enforced. That was the core principle behind our government’s negotiation of an amended air services agreement with the European Union (EU), known as the U.S.-EU Air Transport Agreement (ATA). I know this because I was in those discussions while serving as Deputy Secretary of the United States Department of Transportation (USDOT).

Today, some basic facts about this agreement and the applicability of its provisions have been twisted beyond recognition in the pending case involving Norwegian Air International (NAI), an Irish subsidiary of Norwegian Air, which seeks USDOT approval of a foreign air carrier permit application to fly to the United States. Let’s set the record straight.

NAI is requesting to launch a complex international airline operation that at its core challenges explicit provisions of the agreement, in particular those specifically designed to protect high labor standards for cabin crews on both sides of the Atlantic. Norwegian Air’s plan is to have their Irish subsidiary hire crews under Singaporean or Thai law that allows them to fly without having to comply with the employment and tax laws of its Norwegian home country. If approved, this highly unusual application guts the core of the ATA’s labor provision, which is the logical forum for such disputes.

Concerns about potential “forum shopping” by airlines were raised during the negotiation process. Those concerns were especially relevant because this agreement would allow European air carriers, for the first time, to operate from any country in the EU to any point in the US. The opportunity for airlines to forum shop for favorable labor, tax and other laws was clearly a point of contention for both sides.

The labor provision was achieved after extended discussions with our European counterparts that resulted in what is today known as Article 17 of the ATA. This article unambiguously sets out a clear commitment to protect against air services that “undermine labor standards or the labor-related rights and principles contained in the Parties’ respective laws.” This key provision of the agreement is now being challenged by a USDOT Show Cause Order, which does not refute the legitimate concerns being expressed by U.S. and European flight crew unions, but sidesteps the issue by declaring that those concerns are not a basis for denial of NAI’s or any other permit application.

The Show Cause Order tentatively concludes that Article 17 cannot be applied in deciding whether to grant operating authority to an EU airline. To the contrary, a decision whether or not to grant operating authority based on compliance with Article 17 is at the heart of implementation of the ATA.

We live in a world of rapid international economic integration and changing employment models. Trade agreements such as the ATA must benefit all sectors of our society, including U.S. workers. That, I believe, is what we accomplished in the ATA, and now the U.S. needs to uphold the core labor protection provisions of the agreement.

This administration should be justifiably proud that appropriate labor provisions were negotiated into this agreement; let’s use them for their intended purpose.

John D. Porcari, former Deputy Secretary at the U.S. Department of Transportation, is now President of U.S. advisory services at WSP | Parsons Brinckerhoff. This column, originally posted at Huffington Post, is posted at The Stand with the author’s permission.