A License to Distort Competition

Irish regulator approves Norwegian's non-Irish airline

European pilots regret yesterday’s Irish Aviation Authority (IAA) decision to grant a permanent operating license and Air Operator’s Certificate (AOC) to Norwegian Air International – a long haul subsidiary of Norwegian Air Shuttle – which seeks to fly between Europe, Thailand and the USA. With this, the IAA sets a harmful precedent allowing airlines to ‘shop around’ for lenient legislation, bypassing regulatory, tax and social obligations that their competitors have to comply with in their countries. It also raises questions about the potential flight safety implications of NAI’s deliberately complex business structure.

“The Irish Aviation Authority’s decision will have serious safety and social repercussions: Competition in aviation is welcome but Norwegian’s ‘business’ model is a book example for a ‘flag of convenience’, opening the way to social dumping and undermining labour standards. This contravenes the EU-US Air Transport Agreement which contains distinct provisions against such practices,” says Nico Voorbach, ECA President. “We therefore urge the EU Commission to take a firm stance to ensure the provisions of the EU-US Agreement are respected. For the same reason we call upon the US Department of Transport to refuse a foreign air carrier permit to NAI.”

Using the Irish AOC, the airline seeks to perform long-haul flights to the U.S. as an Irish airline, without ever touching Ireland – but benefitting from Ireland’s favorable tax regime – while hiring pilots with Singaporean temporary contracts, basing them in Bangkok (Thailand), but allowing them (de facto) to live in Europe, where they will neither pay taxes nor social security.

“Passenger safety is the other crucial issue, as we have severe concerns about the ability of the Irish authority to perform adequate safety oversight on such a complex and opaque company set-up” says Philip von Schöppenthau, ECA Secretary General. “NAI’s business set up contains a similar mix of elements that contributed to the fatal Cork accident and its ‘employment’ model discourages an open incident reporting by crews hired on temporary contracts in Asia. Regulators on both sides of the Atlantic must think carefully about the potential safety implications their decision might have.”

For more information about Norwegian Air International’s operations, including its complex structure, please contact ECA at ke@eurocockpit.be and see more about Norwegian Air International’s rights’ avoidance scheme

Download Press Release (pdf)

 

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For further information, please contact:

Nico Voorbach, ECA President, Tel: +32 491 378 982

Philip von Schöppenthau, ECA Secretary General, Tel: +32 2 705 32 93