DOT Ruling On Norwegian Air Not The End Of The Story

by Madhu Unnikrishnan
Sep 04, 2014

The U.S. Transportation Department (DOT) issued a ruling denying Norwegian Air International's (NAI) application for an exemption to serve the U.S. The ruling came around 5 p.m. EDT, or just moments before DOT's statutory deadline for the decision. 

A bit of background may be in order here. The DOT by law must rule within six months of receiving an application for an exemption, and it got NAI's application at the end of February. The deadline therefore was Aug. 31, but given that was a Sunday and Sept. 1 was a federal holiday, the deadline was extended to Sept. 2. And DOT, in typical Washington fashion, waited until the very last minute to sneak the decision in.

Note that this is not the decision on NAI's foreign air carrier permit; instead, it's a decision on NAI's an application for an exemption, which would allow NAI to operate flights to the U.S. while the DOT weighed the foreign air carrier permit. With its decision, DOT essentially said NAI must wait until the final ruling on its permit before it can fly to the U.S.

DOT dismissed the case -- and a docket that had been inundated with comments for and against NAI's application -- without prejudice toward the ruling on the permit and on "procedural grounds."

That's a lot of background, but it's important. Basically, DOT punted the decision down the road, probably because there is little political appetite to rule on such a controversial case before the midterm Congressional elections in November, or so our sources tell us. 

NAI's opponents, led by organized labor, applauded DOT's decision, but it may be too early to pop the champagne corks. Capt. Lee Moak, president of the Air Line Pilots Association, acknowledged this by saying the decision puts NAI's "scheme on hold," and urged the DOT to deny NAI's application for a foreign air carrier permit.

It's uncertain which way DOT will rule. At issue is NAI's plans to operate from Ireland with an Irish air operator certificate. Its supporters say this is exactly the kind of business model the U.S.-EU open-skies agreement was designed to create. Opponents say NAI is skirting Norway's strict labor laws and therefore is violating the "social dimension" clause of the open-skies deal.

Usually, European carriers are approved in a matter of weeks, but with this long delay, DOT doesn't seem to know which way to turn. Until a final ruling, NAI's opponents and supporters will no doubt continue waging the public-relations war, through dueling press releases, billboards, signs on buses and newspaper advertisements, hoping to win the hearts and minds of lawmakers and regulators (and the flying public).  

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