DOT keeps Norwegian Air in limbo
By Robert Silk / March 13, 2016

Ultra-low-cost carrier Norwegian Air is already making its imprint on transatlantic air travel. Beginning in May, the carrier will offer 29 nonstop routes from nine destinations in the U.S. and U.S. territories to London, Oslo, Stockholm, Copenhagen and Bergen, Norway, often at prices that can’t be matched by the three major airline alliances’ member carriers.

But even as Norwegian prepares to launch service to Paris from New York, Fort Lauderdale and Los Angeles this summer, the carrier remains mired in a regulatory holding pattern that the DOT has kept it in for more than 27 months. And there’s no indication when that limbo will end.

“The DOT must struggle for ways to sound credible to Norwegian when they explain why there has not been progress,” said travel industry analyst Henry Harteveldt of Atmosphere Research Group.

At issue is a foreign-carrier permit application submitted in December 2013 by Norwegian Air International, an Ireland-based Norwegian subsidiary, for permission to begin operating flights between the U.S. and Europe. That entity would operate under a different DOT approval than the Norway-based Norwegian Air Shuttle, which currently operates Norwegian’s flights to and from the U.S.

Legacy U.S. carriers American, Delta and United opposed the application as did the Air Line Pilots Association International (ALPA).

In an interview, Norwegian Chief Legal Officer Frode Berg said the carrier needs the Ireland-based entity to more easily expand its route network beyond the U.S. and Europe to South America, Asia and Africa.

The reason, Berg said, is that Norway is not a member of the European Union (EU), so while Norwegian Air Shuttle, due to terms that Norway has negotiated with the EU, does benefit from the EU-U.S. Open Skies agreement, it is much trickier for the Norway-based entity to develop routes into other non-EU countries.

Ultimately, Berg said, Norwegian wants to use Norwegian Air International on flights from the U.S. to Europe because Ireland is an EU member, which means travelers would be able to seamlessly connect on the carrier to other parts of the world as Norwegian builds its global route network.

But while Berg said that the DOT takes an average of 52 days to rule on applications, and other observers say that they can’t recall an application that sat in limbo for as long as the Norwegian Air International application has, the DOT isn’t offering any hint about when it will make a decision.

“The application involves novel and complex issues, and we are taking the necessary time to evaluate the long-term application appropriately,” the agency said in a statement on Feb. 29. “There is no statutory deadline or current estimate as to when the analysis will be complete.”

In particular, the DOT is reviewing charges by ALPA and echoed by American, Delta and United that Norwegian formed the Irish-based entity in order to take advantage of labor laws that are less stringent than those in Norway. In written comments to the DOT, ALPA alleged that Norwegian uses pilots based in Thailand rather than Norway.

Norwegian, in turn, said that it hires pilots in each market where it has a base. At its U.S. bases in Fort Lauderdale and New York, the company said, the cabin crew is composed of U.S. employees.

In the immediate sense, the DOT’s holdup of the Norwegian International application likely isn’t taking a bite out of potential low-cost, transatlantic competition. The major alliances One World, SkyTeam and Star account for upward of 85% of flights over the North Atlantic. Berg said that with Norwegian’s expansion plans in Africa, Asia and South America effectively on hold due to the DOT delay, the company has been focusing mainly on expanding the U.S.-Europe service of its Norwegian Long Haul subsidiary.

Potential new U.S. markets included Denver and Chicago, Norwegian Chief Commercial Officer Thomas Ramdahl said. Baltimore, from where Norwegian already flies to the Caribbean, is also in the mix.

Still, founding Virgin America CEO Fred Reid, who faced his own opposition from the legacy U.S. carriers before the DOT eventually approved Virgin’s application for launch in 2007, said the objections to Norwegian are all about thwarting competition.

“These guys are making more money than they ever have in their history, and at the same time they are getting more protective every week,” he said.

Atmosphere’s Harteveldt said he could not recall an instance in which the DOT took so long to rule on an application.

“If they’re not going to approve, they shouldn’t approve,” he said. “If they are going to approve it, they should approve it. It’s absurd.”

Berg asserted that the delay is intentional, and he argued that under the EU-U.S. Open Skies agreement, denying his company’s application for the Irish entity isn’t an option for the DOT.

“All they can do is delay,” he said. “I think that it is clearly politically motivated.”

 

Agreed. Most people have NO IDEA how much work he has done on Delta pilots behalf over the last 27+ years. He does it because most of us just want to fly the line. And yeah, he is (one of) the smartest guys in the room. I for one was glad he was on our side.

 

Perhaps a half a billion+ in dues paid by this group over the last 27 years....... and the best it gets us is some guy who took a job flying.... then doesn't fly the line...and seeks a non pilot job most pilots don't want to, and are ill equipped to do.....

Stupid is as stupid does..... the history makes about as much sense as an airline pilot cleaning his own gutters.

 

Let me guess. You have never done any significant union work?

 

Let me guess..... you clean your own gutters?

 

No, I don't and pilots don't perform secretarial, accounting, IT or a myriad of other specialized functions of our union.

Pilots who have done any significant union work understand this and don't fall prey to such superficial and misleading anti-union talking points.

 

So its anti union to suggest we are not getting reasonable value for the cost of our representation? Ok then.

BTW....I was being conservative..if our CBA made it available.........I'm betting the dues total for the last 27 years.... is well over a billion dollars.

It was pilot 'experts' that assured us the pension was secure....I wasn't. In fact.... if we could recover Mr RH postings from the old dalpa form....I'm pretty sure he would be among that group.

Any half witted financial expert could have looked at the DB plan and immediately realized it was highly at risk....

It was pilot 'experts' that assured us self imposing draconian pay cuts would stave off bankruptcy..... it didn't. Umm..would that be yet another part of being the smartest guy in the room?

It was pilot 'experts' that said age 65 wasn't in the cards..... and then used the indelible age 60 benchmark to formulate silo distributions...... turns out it was. Umm... did that happen in the last 27 years?

If RH is the smartest guy in the room we find ourselves in....... than we are, and have been......in the wrong room....

 

First of all RH was the merger committee chairman, who's committee's primary function is to protect the seniority of Delta pilots in the event of a merger. I believe RH would have done a good job for the Delta pilots if we were to find ourselves in another merger, as he has for the UAL pilots and the DAL pilots in 2008. Second, there seems to be very little comm from our reps with regards to his recall. So far I've received no official communication on why he was recalled. I'd expect more transparency and inclusion from our reps. This recall was a complete surprise to the pilot group. No comm prior to his recall, a resolution, apparently from what I can gather, presented to the MEC on day one, RH not present at the meeting, and a same day execution.

 

I also agree that guys should not rub it in - he served, his DALPA time has come and gone, and now he can enjoy being a line Pilot.

FWIW I couldn't care less how smart he is. He may have done some good things over the years but he appeared to lose touch with the Pilot group he was supposed to be serving and his current posts on FB do not serve the Delta Pilots or DALPA.

Scoop

 

You gotta be kidding. You lose credibility when you say stuff like this.
I'm only surprised the MEC waited a whole week after the new reps took office.

Harwood's ALPA days are over.
I just wish he would show some class and quit taking potshots at our new leaders. Sinking to the "Curly/Mullis/Parker" level is conduct unbecoming.
Its certainly not helpful to the Delta pilots and the petty bitterness only damages his reputation if he hopes to have any future with his consulting business.