THE SECRETARY OF TRANSPORTATION WASHINGTON , D

.C. 20590

The Honorable John Garamendi U.S. House ofRepresentatives Washington, DC 20515 Dear Congressman Garamendi: April 04, 2014

Thank you for your letter regarding the application ofNorwegian Air International Limited (NAI) for authority to conduct U.S. services. Given that a number ofinterested parties have filed responsive pleadings to NAI's application and this matter is currently pending before the Department, I am sure you understand that I cannot comment on the merits ofNAI's application. I assure you, however, that we will give full and careful consideration to all ofthe pleadings filed on the record before we reach a determination in this matter. As is our standard practice, I am placing a copy ofyour letter and my response in Docket DOT-OST

-2013-0204, as a contact outside the record ofthis case. You may track the progress ofthis case and view the publicly available documents filed in the docket by accessing the Federal Docket Management System at www.regulations.gov and searching for Docket DOT-OST-2013-0204. I hope this information is helpful. Sincerely,JOHN GARAMENDI 3 RD DI S TRI C T , C A LIFORNIA

ARMED SERVICES COMMITTEE STRATEGIC F ORCES SUBCOMMITTEE T ACTICAL AIR AND LAND FORCES S UBCOMMITTEE TRANSPORTATION AND INFRASTRUCTURE COMMITTEE R ANKING M EMBER COAST GUARD AND M ARITIME TRAN SPORTATI ON Suo COMM tTTE E UN ITED STATES HOUSE OF REPRESENTATIVES

WATER R ESOURCES AND ENVIRONMENT SuecoMM t TTEE AGRICULTURE COMMITTEE
GE NERAL F ARM COMMODITIES AN D R ISK MANAGEMENT SUBCOMMITTEE

The Honorable Anthony Foxx Secretary U.S. Department ofTransportation 1200 New Jersey Avenue SE Washington, DC 20590 Dear Secretary Foxx: February 28 , 2014 2438 RAYBURN HOUSE OFFICE BUILDING WAS HINGTON, DC 205 1 5 PHONr: (202) 225
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I write to express my concern about a petition to your department by Norwegian Air International Limited (NAI), subsidiary ofthe rapidly-growing low-cost airline Norwegian Air Shuttle (NAS), to operate into the U.S. as a foreign air carrier. NAI's application raises the specter ofa flag-of-convenience model that, ifapplied to the airline industry, will have devastating effects akin to those seen in the U.S. maritime industry

. Furthermore, NAI has pursued a global outsourcing business model for its pilots and flight attendants (or " aircrews" ) that would put U.S. airlines and their employees at a competitive disadvantage. Indeed, this airline bearing the name "Norwegian" describes itselfin the application as "a foreign carrier of Ireland. " The cause ofmy concern is NAS 's publicly-stated attempt to avoid its legal 

### obligations under its labor contracts and Norwegian labor law. As you know, the U.S.-European Union Air Transport Agreement prohibits the establishment offlags ofconvenience to evade labor protections. NAI/NAS plans to register its long-haul aircraft in Ireland, whose labor laws, unlike Norway's, would allow outsourcing ofaircrew beyond the EU. NAI/NAS plans to operate Irish-registered aircraft to fly from Norway and other EU points to the United States by outsourcing its labor to EU aircrew based in Thailand under individual employment contracts governed by Singapore law. In short, Ireland has become the aircraft registry ofchoice for NAI/NAS to avoid Norwegian taxes, labor laws, and social costs
. As Ranking Member ofthe Transportation and Infrastructure Committee's Coast Guard and Maritime Transportation Subcommittee, I am fighting to rebuild the U.S

. maritime industry-a prime example ofthe type ofindustrial devastation that can be caused by the use of " flag of convenience" open registries. This business practice allows companies to register merchant ships in a foreign state to avoid its own country's regulations, taxes, and labor costs. Open registries are countries or organizations that register foreign ships and where more than 90 percent ofthat country's vessels are foreign-owned. Liberia, the Marshall Islands, and Panama are among the



# s 10-140325-011 PRINTED ON RECYCLED PA PERmost well-known open registries where U.S.-owned merchant ships are registered to avoid U.S

. taxes , regulations, and labor costs. Today, roughly 80 percent ofthe world fleet is operating under a flag ofconvenience, and the number ofU.S. crewjobs in the U.S.-flag maritime industry has plummeted from more than 100,000 in 1960 to an estimated 2,500 in 20 12-jobs that would be lost but for the anti-cabotage provisions ofthe Jones Act. Today, U.S.-flag ships carry domestic traffic almost exclusively

. As a result, as DOT has acknowledged, over 97 percent ofour foreign trade is carried on foreignflag vessels. And as Congress has noted, over the last 35 years, the number ofU.S.-flag vessels sailing in the international trade has dropped from 850 to less than 100. I am deeply concerned that NAIINAS's business model will substantially and permanently harm the U.S. airline industry' s transatlantic business. NAIINAS is using 

### Ireland as the "Liberia" of the airline industry to employ Singapore law in the service ofits EU-US transatlantic services. Unlike their European competitors, however, U.S. carriers cannot pick and choose which labor and regulatory regime anywhere in the world will most advantage its operations. Moreover, the NAI/NAS business model leads to serious questions about whether Ireland' s or another country's safety regulations will govern these long-haul operations that will never touch Ireland. For these reasons, I believe your review ofNAIINAS ' s application will clearly indicate that it is not in the public interest, and should therefore be denied. I appreciate your thorough consideration ofthese deeply concerning issues, and encourage you to contact Emily Burns of my staffifI can be of assistance

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