AIR TRANSPORT : DECISION TIME FOR US ON NORWEGIAN IN KEY OPEN SKY CASE.

 
FREE EXCERPT

The transatlantic air passenger market may be on the cusp of a big shake-up as the low-cost carrier Norwegian tries to avail of the 2007 EU-US Open Sky agreement to expand into new domains. In the coming weeks, the US Department of Transportation (DOT) will decide on Norwegian's application for an air operator permit, the final step necessary to launch a new transatlantic low-cost carrier. The case is being watched with avid interest, largely due to Norwegian's innovative business model for its newly-created transatlantic subsidiary, Norwegian Air International (NAI). Headquartered in Ireland, the company is recruiting and domiciling pilots and cabin crew in Thailand and the US. The labour unions and many of Norwegian's competitors are crying foul, saying this is social dumping that is forbidden under Article 17 of the Open Sky agreement. But Norwegian has many supporters, including the European Commission, the Irish and Norwegian governments, and some other carriers.

Norwegian scored a major coup, on 12 February, when Irish aviation authorities granted NAI, whose management staff is based at Dublin Airport, an air operator certificate. Norwegian wants to start flights from London Gatwick to New York, Orlando and Los Angeles this summer and is thus calling on the DOT to take a decision quickly. Asked about timelines, a DOT spokesperson told Europolitics Social: "We are in the midst of a contested proceeding and we are not in a position to address timing issues at this time". The Irish green light for Norwegian increases pressure on the DOT to grant the permit because under Article 6 of Open Sky, the US authorities should automatically recognise decisions taken by the appropriate authorities in the EU. Both the Irish government and European Commission have stressed this in their comments to the DOT. So too has the express carrier FedEx, which said, on 21 February, that the Irish decision "should be the end of the inquiry".

BITTERLY CONTESTED BATTLE

But the big transatlantic carriers, including Delta, United, American, Lufthansa and Air France-KLM are demanding that the DOT conduct a more detailed probe into NAI's business model. The trade unions for pilots and...

To continue reading

REQUEST YOUR TRIAL