Typhoonpilot

Norwegian has announced it will be cutting two routes between Sweden and the US, and it’s blaming the move on Sweden’s new aviation taxes.

Norwegian will end nonstop service between Stockholm (ARN) and Oakland (OAK) and Stockholm and Las Vegas (LAS). The budget carrier flies a Boeing 787 Dreamliner between the two cities, with three weekly flights to Oakland. Norwegian had already suspended its Stockholm-Vegas service due to weather related issues in 2016, but this appears to be the nail in the coffin for the route. We’ve reached out to Norwegian for details but have to yet receive a response.

In April, Sweden introduced a new tax on flights that can range from $7 to $49 per passenger, per flight. The tax is environmentally motivated and is supposed to nudge the country toward its sustainable development goals.

When in went into effect Norwegian cancelled one European route and threatened to cancel others. Now they are making good on that threat.

”The long-haul routes are more strained because there is a higher flight tax on them,” Norwegian Communications Manager Charlotte Holmbergh Jacobsson told Dagens Industri.

The shutdown of the routes isn’t due to the tax, Sweden’s Minister for Financial Markets Per Bolund claims. Bolund has a point, Norwegian is plagued by financial issues and operates many unprofitable routes. It reported a net loss of $38 million in 2017.

“The aviation industry is already subsidized through lower VAT and exemptions from fuel taxes,” Bolund said in a statement to Sveriges Radio. “In spite of this, Norwegian appears to have such poor profitability on certain routes that it does not manage the recent fuel-price increase. They should probably rather review how they do business than blame a relatively low aviation tax.”

”We would like to grow our business in Sweden and use Arlanda as a hub, but there is no political will for us to grow here,” Norwegian Spokeswoman Charlotte Holmbergh Jacobsson told Business Insider Nordic. “The aviation tax is a clear sign from the politicians that they want air traffic to decrease.”

stratofactor

Good News, hopefully they will be stopped from coming into the US all together when he FAA Reauthorization Bill passes.

Quote from Sec 530: "preventing entry into United States markets by flag of convenience carriers."

NEDude

Yes, and then witness the start of the aviation trade wars. Do you think the European Union will idly sit by while Europe's third largest trans-Atlantic airline by available seats is barred from entry to the States in violation of the US-EU Open Skies agreement? (The argument that Norwegian is operating in violation of the Open Skies treaty has been shot down numerous times - by the U.S. courts, by the U.S. DOT, and by chief U.S. negotiator for the Open Skies treaty. It is a totally failed argument). Who do you think will win that trade war? You can be certain it will not be the pilots on either side of the Atlantic.

Flytolive

A trade war over a failing LCC that flies Boeings and is undercutting European carriers too in the midst of the Brexit mess? Dream on.

NEDude

It is not just Norwegian Air UK or Norwegian Air International that fit ALPA's definition of "flag of convenience". Swiss, Austrian, Brussels, Virgin Atlantic*, Thomas Cook, Aer Lingus and many others all fit that definition - being majority owned by an entity located in a country outside of their home country. There is no legal way to exclude just Norwegian, many other European Airlines will be negatively affected. And yes, that will start a trade war. Keep in mind too that Norwegian Air Shuttle, the Norwegian AOC, is in absolutely no way, shape or form, a so-called "flag of convenience".

*Virgin Atlantic is only 20% UK owned. 49% is owned by Delta and 31% is owned by Air France-KLM.

Flytolive

Please post your source of, and ALPA's definition since you claim to know.

Varsity

EU carriers make most of their money on trans atlantic flying. US carriers lose most of their money on TATL.

Our domestic market is the golden goose.

All ahead full.

NEDude

Here ya go smart guy. Every single airline I mentioned offers contracts which differ, sometimes greatly, from contracts available in the country of their majority owner.

A flag-of-convenience airline is a carrier that is established in a country other than the home country of its majority owner(s) in order to avoid regulations of the home country. Flags of convenience are often used to decrease labor costs and undercut established markets.

Flags of Convenience

NEDude

It should be noted that in the case of Norwegian, they do not have different terms and conditions based on the AOC you operate for. For example an LGW based pilot on the NAS AOC operates under the exact same terms as an LGW based pilot on the NUK AOC. So there goes ALPA’s argument that it is being used to “decrease labor costs”.

As noted numerous times, NAS, NAI, and NUK all operate under EASA regulations, so the argument that they are being used to “avoid regulations of the home country” is invalid as well.

Fredturbo

Buh bye now, Norwegian. Trump is taking back our jobs. About time versus his failed predecessor.