CAPA strongly opposes DOT's approval of Norwegian Airline's Flag-of-Convenience "Shell Game"

Washington, D.C. (April 16, 2016)— The Coalition of Airline Pilots Associations, (CAPA) representing more than 30,000 professional passenger and all-cargo pilots strongly opposes the U.S Department of Transportation’s (DOT) decision to grant tentative approval for Norwegian Air International’s (NIA) permit to operate in the United States under a “Flag-of-Convenience” scheme. The DOT’s flawed policy decision is a violation of the US/EU bilateral Open Skies Trade Agreement.

“CAPA is extremely disappointed with the DOT’s decision to grant NAI a permit to serve the U.S.”, stated CAPA President Captain Mike Karn. “NAI’s business model consists of shopping the international marketplace for the weakest labor and regulatory laws in order to undercut competition. Furthermore, this unsound policy decision will exempt the low-cost foreign carrier from certain federal statutes regulating foreign scheduled and charter air transportation services in the U.S.”, he added.

NAI’s business model is a “flag-of-convenience” scheme and a shell game to gain an economic advantage over U.S. airlines, and an attempt to evade labor protections. A red flag has been raised as to how far a foreign carrier should be allowed to work-around existing international aviation policies and law in order to gain economic advantages over their U.S. competitors.

The scenario: “A Norwegian company (NAI) holds an Air Carrier Certificate (AOC) from Ireland. However, the company (NAI) is owned by Norwegian Air Shuttle (NAS), an airline based in Norway. NAS established NAI in Ireland, (a destination to which it does not fly) to avoid application of Norwegian employment laws to NAI’s flight crew. These crew members are not covered by European employment laws, but rather by Asian laws. NAI’s pilots are employed by a Singapore company on individual contracts covered by Singapore law. These pilots are then contracted to operate NAI’s aircraft with compensation that is substantially below their counterparts who pilot NAS aircraft.

Article 17 of the U.S.-E.U Open Skies Agreement states: “opportunities created by the Agreement are not intended to undermine labour standards or the labour-related rights and principles contained in the Parties’ respective laws”.

“NAI’s “shell game” violates employee protections included in the U.S.-E.U. Open Skies agreement, which were designed to stop attempts to undermine high labor standards”, said Capt. Karn. “The DOT’s approval for NAI’s foreign air carrier permit to serve the U.S. violates these laws and labor protections,” he added.

“Aviation is a crucial component of our U.S. economy,” stated CAPA President Capt. Karn. “We must ensure that a level playing field is provided for U.S. carriers, to compete globally and ensure that American labor protections are upheld to the highest standards,” he added.

 

The Coalition of Airline Pilots Associations is a trade association representing more than 30,000 professional passenger pilots at carriers including American Airlines, UPS Airlines, ABX Air, Horizon Airlines, Southern Air, Silver Airways, Allegian Air, Kalitta Air, Kalitta Charters II, Miami Air, Cape Air, Omni Air, Atlas Air, Republic Airlines and Shuttle America.

For more information, please visit: www.capapilots.org