By Keith Laing - 07/07/14 04:02 PM EDT
Rep. Ted Poe (R-Texas) said Monday that Norwegian Air is creating a “shell company” for its bid to gain access to airports in the U.S. and European Union.
Norwegian Air is attempting to gain access to airports that are covered under the U.S. and European Union’s “Open Skies” agreement by registering its airplanes in Ireland, which is a member of the EU.
The Scandinavian company says it will be able to offer transatlantic flights for as low as $150 each way if its effort is approved by the Department of Transportation.
“Norwegian Air International (NAI) recently made headlines with its announcement to launch a low cost airline in the U.S. This may sound great on the surface — who doesn’t want to save money on flights? — until you realize what NAI is intending to do: set up a shell corporation to skirt existing laws and put American carriers at a competitive disadvantage,” Poe wrote.
“That’s why I joined 40 of my colleagues in the House and Senate to urge Secretary Anthony Foxx to quickly reject NAI’s application for a foreign air carrier permit,” Poe continued. “By registering their planes in Ireland, hiring crew members through Singaporean contracts, and then basing those crews in Thailand, NAI is structuring a flag-of-convenience air carrier that will not be subject to the individual laws of any one country. No U.S. airlines have that option in the marketplace, nor do any other global airlines.”
Poe added that “if our government signs off on NAI’s permit, it signs off on this type of business model.
“That means NAI will have created its own governing structure, one removed from the transparency rules, labor laws, and safety regulations we take for granted today,” he said.
Norwegian Air’s bid to gain entry into the U.S. and European Union markets has roiled the aviation industry.
The airline has argued that critics are unfairly criticizing its business practices because they are trying to protect their current positions in the international flight markets.
Labor groups that represent U.S. airline employees like the AFA have said Norwegian's inclusion in the Open Skies Act would undermine the entire premise of the pact.
The decision on the Norwegian application rests with the Department of Transportation and the Federal Aviation Administration.
Poe compared Norwegian’s plan to register its planes in Ireland to cruise ship companies that register in foreign countries to avoid U.S. regulations.
“This structure resembles the cruise line industry, where ships registered in Panama and Liberia never touch down in those ports,” Poe wrote. “We need only look to the unfortunate Carnival Triumph disaster in the Gulf last year, where hundreds of people were stranded at sea for days with no food, running water, or power to know how that system of safety ‘oversight’ works for American consumers.”
“NAI appears to be just a shell company, created explicitly to avoid U.S. and Norwegian labor, tax, and regulatory laws,” Poe continued. “Its aircraft, registered in Ireland, have no plans to fly to or from Ireland. This makes surveillance and oversight of the airline difficult. How is the Irish Aviation Authority, responsible for ensuring the safety of the airline’s operation, supposed to effectively ensure compliance with acceptable international standards?”
The Transportation department has not yet offered a timeline for its decision on the Norwegian Air application.