Norwegian Air again...

Obama's bad plane deal

The administration is set to allow Norwegian Air to fly into the U.S. while avoiding Norway's labor laws.

By Richard Trumka and Edward Wytkind

America’s working people are rightly suspicious of trade policy. For too long our trade strategy has protected corporate interests while fueling a race to the bottom in living standards for working families. That sad legacy is now rearing its head in the aviation sector. As you read this, a Norwegian airline is seeking our government’s blessing to launch new trans-Atlantic service into the U.S. that violates our trade rules. Norwegian Air International is just the latest symbol of failed American trade policy and toothless enforcement of trade agreements.

Norwegian Air Shuttle, the parent airline attempting to launch NAI, likes to pride itself on being a low-cost European airline, but the launch of NAI isn’t an attempt to enter the U.S. market. In fact, Norwegian Air Shuttle already flies into the United States. Instead, the operating model it plans for its Norwegian Air subsidiary takes a page from the unfair trade playbook. NAI will use temporary labor by employing Bangkok-based flight crews under short-term Singaporean or Thai employment contracts. This move will allow Norwegian Air to boost profits by beating down workers’ wages and benefits and gaming trade rules.

Norwegian Air Shuttle already serves U.S. cities such as Las Vegas and Orlando and does not need additional authority from the Department of Transportation to expand its flights to American destinations. The company has collective-bargaining relationships with its employees in Norway, but its expansion plans using the NAI subsidiary would sidestep its workforce in Norway in favor of low-cost Asian crews. It is a timeless strategy to bolster its profits: cut costs by circumventing labor standards.

Norwegian Air was formed as a flag-of-convenience subsidiary and incorporated in Ireland, with a clear plan to evade Norway’s employment and tax laws and gain an upper hand on those airlines on both sides of the Atlantic that actually abide by the rules. No one should hold their breath for the company to honor its obligations under its collective-bargaining agreements and use its own workforce. That approach would disrupt the company’s poorly veiled plan to scour the globe for lax labor standards and social laws and use the advantages it acquires to chase profits while destroying middle-class living standards in this industry.

This scheme not only crushes workers. It also violates the worker protections embodied in the U.S.-EU Air Transportation Agreement’s labor provision, known as Article 17 bis, which states: “Opportunities created by the Agreement are not intended to undermine labor standards or the labor-related rights and principles contained in the Parties’ respective laws.” Both sides publicly hailed these protections as a “breakthrough.” Together our nations embraced a high-road approach by which markets and jobs can expand, airlines can grow profits and consumers can secure better air service without undermining wages or gutting collective-bargaining rights. By skirting its labor obligations and undermining airline employees’ rights, Norwegian Air’s business model fails to meet that standard.

Even though Norwegian Air’s plan to offer trans-Atlantic air service blatantly violates our aviation trade agreement, the U.S. Department of Transportation issued an order in April that could pave the way for NAI’s launch in the United States. The department’s order is especially troubling because it effectively claims it can’t enforce the strong labor standards that were previously negotiated by its own administration. The department’s general counsel concluded that the labor chapter of our aviation agreement “does not provide an independent basis” for denying an “otherwise qualified” carrier a permit — even though the agreement explicitly states that its labor standards “shall guide” implementation of the agreement. If the labor chapter does not provide the basis for denying a carrier a permit, then Article 17 bis has no teeth.

Norwegian Air’s flag of convenience model has no place in our growing trade relationship with Europe. As the labor movement wages a fierce campaign to change the way America negotiates trade agreements, at the heart of that campaign is the principle that expanded trade must not come at the expense of working people. And embedded in that principle is the idea that our government will not only negotiate employee protections into trade agreements but also will actually enforce them.

The Department of Transportation must hit the stop button on this order before it sanctions an airline business model that seeks to avoid the clear requirements of our trade rules with the EU and puts thousands of U.S. aviation jobs at risk. If the administration does not reverse course and deny NAI’s application, it will be yet another reminder that American trade policy is failing working people. It will also show the failure of the administration to enforce its own explicit employee protections.

Unless Norwegian Air’s application is rejected, the administration would be saying it’s OK for an airline from Europe to avoid social laws in its own country, escape its obligations under existing union contracts and shop the globe for the cheapest labor, tax and regulatory compliance costs without having to worry about compliance with explicit labor protections in the U.S.-EU accord. That is a raw deal for working people and puts another great American industry at risk.

The government should not let this airline fly.