Friday, April 15, 2016
The U.S. Department of Transportation today issued a show cause order proposing that Norwegian Air International (NAI), an Ireland-based subsidiary of Norwegian Air Shuttle (NAS), be granted a foreign air carrier permit that will allow it to begin operating flights to the United States. Norwegian's application has been pending for an unprecedented 28 months as the U.S. has attempted to assess the applicability of Article 17 bis of the US-EU Air Services Agreement. In article 17 bis, both parties pledge support for high labor standards. Unions have accused Norwegian of establishing the subsidiary in Ireland to take advantage of lower labor costs compared to Norway. The delay has drawn repeated criticism from EU officials, who insist the Air Services Agreement requires the U.S. to approve the application of any carrier owned by nationals of an EU Member State operating under the "common carrier" designation, thereby rendering any questions of labor arbitrage a strictly internal matter for the EU. The show cause order is a precursor to a final approval, which will likely be issued in the coming months.