US regulators have finalised their approval for a foreign air carrier permit to Norwegian Air International, ending one of the most controversial disputes that have dominated the US airline industry in recent years.
The US Department of Transportation’s (DOT) move today comes exactly three years after NAI first applied for a foreign air carrier permit in 2013, and follows the agency’s tentative approval issued in April.
The decision will allow NAI, an Irish subsidiary of Norwegian, to launch low-cost transatlantic service to the US. Norwegian itself already operates long-haul US flights, but says NAI will be able to utilise EU traffic rights.
“Regardless of our appreciation of the public policy arguments raised by opponents, we have been advised that the law and our bilateral obligations leave us no avenue to reject this application,” says the DOT in its final order.
The airline welcomes the regulator’s decision, calling it “long overdue news”.
“While the delays Norwegian have faced have been unfortunate and unnecessary, ultimately the decision now made by the US DOT finally paves the way for greater competition, more flights and more jobs on both sides of the Atlantic,” says Norwegian’s spokesman.
The DOT’s tentative approval in April was opposed by the airline’s critics. US airline unions argue that NAI will undermine labour standards, and called on the DOT to overturn its tentative decision.
The DOT, however, says: “We find that the clear weight of legal analysis in this case directs us to uphold the tentative findings and conclusions previously made.”
The final approval comes days after the European Commission formally requested for arbitration over the matter, alleging that the delay in finalising NAI’s foreign air carrier permit is a breach of the US-EU air transport agreement.
The Air Line Pilots Association (ALPA) says it is "extremely disappointed" with the DOT's decision. “ALPA will take appropriate action to overturn this decision and block the NAI business model from spreading," says ALPA president Tim Canoll.
US labour group Transportation Trades Department AFL-CIO (TTD) called on President Barack Obama to reverse the agency’s decision.
“With this decision, the Obama Administration has failed to enforce the very labour protection it negotiated and sold as a breakthrough in aviation trade policy,” says TTD president Edward Wytkind.
The labour groups accuse Norwegian of basing NAI in Ireland to evade Norway’s labour and tax laws.
While US mainline carriers had previously urged their government to reject NAI’s application, they have remained silent on the tentative approval issued in April.
Norwegian continues to await a foreign air carrier permit from the DOT for its UK subsidiary. The DOT in June rejected Norwegian UK’s bid for temporary exemption authority but has yet to decide on the carrier’s permit application.
Norwegian’s spokesman says: “We now also look forward to our foreign carrier permit for Norwegian Air UK (NUK) to be approved next.”
The DOT’s final approval comes in the final days of the Obama administration, before President-elect Donald Trump takes office on 20 January. It is not yet clear what stance, if any, Trump will take on the NAI dispute.