Norwegian’s Irish tales

Norwegian's Irish talesAviation stakeholders are holding their breath for a decision which will largely determine the future of a controversial Irish company pushing the boundaries of what is legal and sensible. No, it is not Ryanair. This is the story of Norwegian Air Shuttle’s subsidiary – Norwegian Air International (NAI) – a limited company officially ‘based’ in Ireland and seeking to become an airline. NAI is awaiting a permanent air operator’s certificate (AOC) from the Irish authorities and a foreign air carrier permit, from the US Department of Transportation, in order to fly across the Atlantic.

At stake: the particular business model which Norwegian long-haul currently registered in Norway uses to sidestep stricter regulations and labour laws. This ‘model’ currently includes 2 wide-body aircraft leased and registered in Ireland, trans-Atlantic operations and crew based in Thailand with contracts governed by Singaporean law. Such a business model which navigates between Oslo, Dublin, Bangkok, Singapore & Washington is a book example for a “flag of convenience”. Ireland’s low taxes and flexible regulatory environment have been attractive for many companies within and beyond aviation. For NAI although not flying out of Ireland the Irish AOC means favourable tax regime, traffic rights to the USA, as well as avoidance of Norway’s stricter employment conditions and higher labour costs.

ECA, together with US ALPA and other aviation stakeholders, has alerted policy makers and aviation authorities in Europe and the US about the social and safety implications of this business model. It pushes the industry towards a grey zone of aviation regulations and oversight. Such a complex and ambiguous structure will also inevitably distort the level playing field in the industry, leaving air crews in a vulnerable and unclear social position.

These concerns were on the agenda in Oslo where policy makers, EU and US stakeholders, including ECA, met to analyse and discuss Norwegian's new “Irish” model. ECA’s message was clear: 'forum-shopping' and social dumping practices are not acceptable. Competition on the Atlantic is a good thing but it must be based on fair conditions. Pilots in Europe and across the globe should have decent working conditions, including access to pension and social security. The liberalisation of the air transport market must not be an excuse to scorn labour rights, be it in Europe, Asia or America.