Monday, December 5, 2016

DOT Grants Permit to Norwegian Air International Limited

The U.S. Department of Transportation has finally granted Norwegian Air International Limited (NAI) its requested foreign air carrier permit to begin operating flights to the United States. The announcement brings to a close a three-year saga concerning  low-cost carrier Norwegian Air Shuttle's attempt to establish an Irish subsidiary to serve the transatlantic market. The dispute largely revolved around competing interpretations of the U.S.-EU Air Services Agreement, in particular Article 17bis added in 2010, which laid out goals for the maintenance of high labor standards. Some on the U.S. side believed that the objectives of this article were possibly endangered by Norwegian's proposed business plan, which entailed utilization of Ireland's more lenient labor laws as compared with those of the parent company's home state of Norway. Critics of the U.S. position accused the U.S. of engaging in thinly veiled protectionism, rejecting the notion that Article 17bis, which is textually vague, provides clear standards applicable to this case. The EU has complained that the U.S. was ignoring its responsibility under the Agreement to quickly approve foreign carrier permits for properly designated carriers, and had recently taken steps to begin arbitration proceedings against the U.S. on those grounds. The incoming U.S. presidential administration had yet to take a position on the dispute, but now it appears that won't be necessary.

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