The European Union (EU) is moving to take Norwegian Air
International’s (NAI) application to serve the U.S. to arbitration.
The move comes more than three months after the U.S.
Department of Transportation tentatively approved a foreign air carrier permit
for Norwegian’s Ireland-based subsidiary after 28 months of review. But since
then the department has not moved forward with a final decision on the highly
politicized issue.
“I find it regrettable that this is the outcome after more
than two years of deliberations and despite the patience and the goodwill that
the EU has shown,” EU commissioner for transport Violeta Bulc wrote to DOT
secretary Anthony Foxx in a July 22 letter. “I have initiated the decision to
formally request arbitration on this matter.”
Parent company Norwegian Air Group already operates flights
between Europe and the U.S. using its Norway-based subsidiary Norwegian Air
Shuttle. But the company says that DOT approval of the Ireland-based company would
allow it to more easily expand its connecting route network to South America,
Asia and Africa.
While Ireland is a member of the European Union, Norway is
not, and therefore Norwegian Shuttle cannot as easily take advantage of
international EU aviation agreements as NAI could.
Norwegian is also applying for permission to operate U.S.
flights using a UK-based entity. In June, the DOT denied a request by Norwegian
for a quick decision on that application.
The NAI application has drawn opposition from U.S. carriers
American, Delta and United as well as from aviation unions. Approval of NAI,
they say, would allow Norwegian to take advantage of weak Irish labor laws to
hire workers from Asia on short-term contracts at lower wages.
Norwegian calls such claims spurious and says that it has no
Asia-based crew and has committed to using only U.S- or EU-based crew on
transatlantic flights.
The matter has been prominent enough to draw comments from
Democratic presidential nominee Hillary Clinton, who in May urged the Obama administration
to deny the permit.
When it tentatively approved the NAI application in April,
the DOT said that it had taken the unprecedented step of formally consulting
the State and Justice departments. Ultimately, the agency determined that labor
provisions within the U.S.-EU aviation agreement don’t provide a basis for
rejecting an otherwise qualified foreign air carrier permit application.
The EU also says that the NAI application complies with the
agreement.
In her letter to Foxx, Bulc lamented that more than three
months after its tentative decision, the DOT has neither issued a final order
nor given a time frame in which it would do so.
A spokesman for the EU transport directorate didn’t immediately
respond to a Travel Weekly email Thursday. However, a directorate spokesman
told the publication Air Transport World that the arbitration process would
begin in September and is expected to take eight or nine months.
Bulc wrote to Foxx that she is concerned about how the
dispute could affect U.S.-EU aviation relations and “the overall economic and
trade transatlantic agenda.”
The DOT declined to comment on the arbitration notice.