Critics Still Complaining about Norwegian's Ireland Flights
Photo courtesy of Norwegian Air
Norwegian Air continues to receive criticism from some for its long-delayed plans for flights from Ireland to the U.S. Recently, a U.S. congressman wrote to the European Commission complaining that Norwegian is skirting labor and wage laws by basing its subsidiary in Ireland.
Norwegian actually has tentative approval for flights from Cork, Ireland to Boston. The go-ahead from U.S. regulators came after repeated delays and complaints from U.S. labor groups. However, some in the United States are still raising objections.
New objections to Norwegian's Ireland flights
Representative Peter DeFazio, from Oregon, has written a letter to the European Commissioner of Transport outlining his concerns. Basically, the issue is that he and other critics of the deal think that Norwegian Air International (NAI), the Ireland-based subsidiary of Norwegian Air Shuttle, was created to skirt labor laws.
Favorable rules in Ireland would allow the carrier to pay employees less and offer them fewer benefits. Norwegian would be able to hire crews from a company based in Singapore. These crews would work on a contract basis for the transatlantic flights. The worry in the U.S. is that the lower cost of operation would make it easy for Norwegian to undercut its American competitors.
This is nothing new
Both Norwegian and the Irish Aviation Authority have disputed the criticism from DeFazio. Norwegian has said that it always abides by the rules in the countries where it operates and that the U.S. DOT did not find any faults in its application for the Cork-Boston flights.
“The U.S. Department of Transportation have already stated that Norwegian Air International appears to meet the DOT’s normal standards for award of a permit and that there appears to be no legal basis to deny NAI’s application.”
The Irish Aviation Authority echoed this argument, saying that Norwegian was granted flight permits because it planned to abide by the country’s labor laws.
The flights to Boston were originally supposed to start this past spring. However, because there are still objections in the U.S., the issue has been sent to arbitration. NAI's US-bound flights could be delayed until sometime in early 2017.
Change is (eventually) inevitable
The issue is important for U.S. legacy carriers, who have just given some of their employees generous new contracts. It might prove hard for them to compete on price on transatlantic routes with airlines that have contracted flight crews that do not receive benefits and are paid lower wages.
But the low-cost business model is probably not going away anytime soon. In an interview with a local radio station, Cork Airport Managing Director Niall McCarthy pointed out that Ryanair has been very successful with the kind of low-operation-cost business model that Norwegian is try to bring to transatlantic flights.
“Norwegian Air International operates... like Ryanair operate in Europe and Ryanair has revolutionized air travel in Europe and essentially it has made low-cost efficient travel available to people throughout Europe and changed the market in Europe.
“And if a low-cost carrier enters the market on the Atlantic corridor, the same efficiencies will apply – cheaper fares will apply and the existing operators and trade unions don’t want to see that happen – it’s all about protectionism and is anti-consumer.”
It is true that lower fares will change the game for the transatlantic market. Other low-cost carriers are most likely watching and waiting. As soon as Norwegian gets the go-ahead, other airlines can use Cork-Boston as a precedent to set up a similar business model for transatlantic flights to America.
That’s good news for travelers, who should have access to lower fares, but bad news for labor groups, who will have a harder time getting new contracts from airlines.
More by Josh Lew
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