A US appellate court rejected an attempt by four employee unions to overturn a foreign air carrier permit awarded to Norwegian Air International, dealing a severe blow to labour’s 1.5-year-old campaign to block the low-cost-carrier’s so-called “flag of convenience” business model.
The order on 11 May by the US Court of Appeals shifts the unions’ legal battle against flags-of-convenience carriers to Congress.
The US House of Representatives has proposed in a reauthorisation bill for the Federal Aviation Administration to make foreign air carrier permits contingent on proving they would serve in the public interest.
The Air Line Pilots Association, International, one of four unions that challenged Norwegian’s permit, is now calling on the Senate to insert the same provision in their version of the FAA reauthorisation bill.
“While we are disappointed, ALPA is no less determined in calling for the United States to enforce its trade agreements and ensure US workers have a fair opportunity to compete internationally,” says Tim Cannoll, ALPA president.
ALPA’s opposition to Norwegian Air International’s operations in the USA began more than five years ago.
Norwegian Air International applied to the Department of Transportation for a foreign carrier permit in December 2013. The carrier’s parent, Norwegian Air Shuttle, is based in Norway, but the application called for Norwegian Air International to be based on Ireland, a member of the European Union with less costly labour standards. Moreover, Norwegian Air International contracted with a Singapore-based firm to provide flight and cabin crews.
Three years later, DOT approved Norwegian Air International’s permit to operate scheduled passenger flights to the USA in December 2016.
Three unions – Association of Flight Attendants-CWA, Allied Pilots Association and Southwest Airlines Pilots Association – joined with ALPA to challenge the DOT order.
In the 11 May ruling, the Court of Appeals rejected both of the unions’ arguments by pointing to the precise wording of the statute used by the DOT to evaluate applications for foreign air carrier permits.
The unions’ argued that Norwegian’s application could only be approved if it serves the public interest, but the Court of Appeals noted that the statute plainly says that such permits have two paths to approval. The DOT is allowed to approve applications of carriers designated by their national governments to provide public transportation, or if the permit would serve the public interest.
“Attempting to convince us that ‘or’ really means ‘and’, the Unions point to the statute’s history,” according to the court’s ruling. “In doing so, however, the Unions run afoul of a fundamental principle of statutory interpretation: where the text is unambiguous, as it is here, courts may not look to history.”
Further, the court also rejected the union’s second argument, which stated that the DOT is required to comply with a provision in the air transport agreement with the EU that certain principles “shall guide” decisions, including an appreciation of the “benefits that arise when open markets are accompanied by high labour standards”.
But that statement of principle “imposes no specific obligations on the [DOT] when considering a permit application”, the court’s ruling shows.