UPDATE ON NORWEGIAN AIR INTERNATIONAL APPLICATION

On July 14, 2014, representatives from the U.S. Departments of State and Transportation met with European Commission (EC) officials to discuss the EC’s views on the meaning and applicability of Article 17 bis so that DOT could take those views into consideration during its review of the NAI application.

It is the opinion of the EC that Article 17 bis provides no legal basis for a party to unilaterally deny an application under Article 4 of the Agreement.  If a party has a concern about Article 17 bis, it should be brought to the Joint Committee.  Given this, it is the EC’s position that Article 17 bis of the Agreement cannot be used by one party as a mechanism to refuse to grant operating authorization under Article 4 of the Agreement to an airline of the other Party.

This meeting sparked many new filings in the docket, which are summarized below by issue.

Issue:  Consideration of Article 17 bis in implementation of Air Transport Agreement

In favor of the application’s approval, Delegation Chairmen John Byerly and Daniel Calleja noted that the EC’s position is consistent with the parties’ intentions when the U.S.-EU Open Skies Agreement was being negotiated.  Federal Express agrees with the EC’s view that “Article 17 bis itself does not formulate a legal rule that can be applied unilaterally by one party”.

On the other hand, the Allied Pilots Association commented that Article 17 bis was formulated by EU and U.S. negotiators, in part to address Labor Representatives’ concern that carriers might seek to evade social laws and undermine labor standards by engaging in venue-shopping.  The Southwest Airlines Pilots Association (SWAPA) noted that no definitive language exists in Article 17 to define the article’s consideration as anything other than guidance for a decision of fitness by a sole party to the agreement.

Issue:  Public Interest

Numerous applicants including Air France, Austrian Airlines, KLM Royal Dutch Airlines, and SAS, urged the Department to deny NAI’s application because approval would be not be consistent with the public interest.  U.S. carriers such as Delta Airlines, United Air Lines, and American Airlines commented that the basic objectives of Article 17 bis would be undermined if DOT approves NAI’s application, as it would allow NAI to enter the U.S.-EU market by establishing “a de facto flag of convenience” designed to go around Norway’s labor protection laws.

Issue:  Promotes U.S. Economy

Washington Airports Task Force, the American Society of Travel Agents, Travel United, the U.S. Travel Association, the Port of Oakland and the Broward County Aviation Department all filed in support of NAI’s application, arguing that approval will benefit growth of the transatlantic market, provide additional choices to the traveling public, and bolster the U.S. economy by creating jobs in the travel industry and through increased airport traffic.