BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Appli cation of ) ) ) ) Docket DOT-OST- ) 2013 ; . 0204 ) )

--------------~- - - -- - - - - - - - -- - - - - - ) Norwegian Air International Limited for an exemption under 49 V.S
. C
. § 40109 and a foreign air carrier permit pursuant to 49 V.S.C. § 41301

ANSWER OF FEDERAL EXPRESS CORPORATION

Communications with respect to this document should be sent to: Nancy S. Sparks Managing Director Regulatory Affairs FEDERAL EXPRESS CORPORATION 1700 Pennsylvania Avenue , N.W. Suite 950 Washington, D.C. 20006 (202) 393-9286 (phone) (202) 628

- 0654 (fax) Email: nssparks @ fedex.com

Dated: February 12,2014 M. Rush O'Keefe , II'. Senior Vice President & General Counsel Steven H. Taylor Vice President Regulatory Affairs FEDERAL EXPRESS CORPORATION 3620 Hacks C ross Road Building B , 3rd Floor Memphis, Tennessee 38125 (901) 434-8586 (phone) (901) 434-8283 (fax) Attorneys f

or FEDERAL EXPRESS CORPORATIONBEFORE THE D EPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON , D . C. Application of ) ) ) ) ) ) ) ) Docket DOT -OST2013-0204 . Norwegian Air International Limited for an exemption under 49 D.S.C. § 40109 and a foreign air carrier permit pursuant to 49 D.S.C
. § 41301

ANSWER OF FEDERAL EXPRESS CORPORATION

Federal Express Corporation ( " FedEx") files this answer to the Notice , served January 30 , 2014, by the Department of Transportation (the " Department") in the docket relating to the application of Norwegian Air International Limited ("NAI") for a foreign air carrier permit. The Notice contains information provided by the European de legation in a private government-to-government se ssion held during the meetings o f the Joint Commi ttee, formed under the U.S.-European Union Air Services Agreement (the "U.S.-EU Open Skies Agreement"). FedEx has observed the growing level of ac tivity in this docket and appreciate s the 

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# I opportunity to provide comment pursuant to the Notice. FedEx sees nothing in the Notice , other than the fact that the Air Operator's Certificate ("AOC " ) has yet to be issued , as a reason to reject the applicatio n o f NAI. We conclude that NAI ' s application should be granted and allowed to benefit from the terms of the U.S.-EU Open Skies agreement once that AOC has been issued.In fac t , it w a s the intent of the U.S.-EU Open Ski e s Agreement not to probe the decision o f a national regulator in m atter s of fitnes s and qualification. See Article 6 bis . In order to m ake applications less burdenso me , the Dep artment created a spe c i al procedure f or Europ e an c arriers ' applications for a foreign c arrier p ermit
. I This uniqu e proc e dure under scores the imp ortance of the sp ecial av i ation relation s hip that the 

## u . s . and th e European Union intended to further by signing the U . S-EU Open Skies Agre ement . This agreement is the key s tone of the U . S. government policy in favor o f op eni ng aviati o n market s. Fe dEx i s of the v iew that a re jecti on of thi s application w ou l d vi olate the cl e ar term s of the D. S -EU Open Skies Agreement
. Once an AO C i s issued , a European Member State i s affirming that a thorough review of the air operator has been undertaken and that comp liance with national law is being confirmed b y that M ember State . For the U. S
. to dismis s the app lic atio n after that c erti f ication i s a re

jectio n o f that Memb er State ' s av i ation regul atory scheme . There i s no re ason for such a rejection grounded in saf ety . Irel and remains rated Category 1 by the U . S
. Federal Aviation Administration
. It is the regulator of an airline th at operates to the U.S, without any qu e stion by the D epartment . It i s , in fact , o ne of the mos t resp e cte d avi ation auth oriti e s i n the world
. In it s 2010 audi t b y the Intern ational Civ il Av iati on Org aniz ation ( I C AO ) , the Irish Avi ation authority ranke d i n the top ten ag enci es in

I Appli cati on Procedure s f or Foreig n Air Carri er s o fth e Europe an Union , Febru ary 19 ,2 00 9, http : //ww w. .dot
. goy/ sites/dot
. gov/fi les l docs/ ADD] ication % ?OProcedures % 20for % 20 EU % 20can ' ier s -O )

- 19- 2009
. pdf 2the world in recent audits by slightly ahead of the United States? On safety, the most important rating for any airline, NAI would be held to the highest standards and the issuance of its AOC would indicate that it had passed a rigorous review of its safety procedures
. There is no reason for rejection in terms of ownership and control. According to the Notice, NAI is wholly owned by Norwegian Air Shuttle ASA ( " NAS") , which is undisputedly a Norwegian company and the holder of a Norwegian AOC. Under the first stage of the U.S-EU Open Skies Agreement, it was agreed that citizens of members of the European Community Aviation Area would be treated as nationals of Member States for purposes of ownership and control. See Article 4(b) and Annex 4, Article 1 (3). Therefore, NAS is entitled to own NAI, which is intended to be an Irish carrier. On employment, there is nothing in the No tice that indicates that applicable labor laws are not being complied with. Some commentators in this docket seem to think that a difference in hiring practices, organizational results and employment terms should disqualify
a carrier from serving the U.S. under this agreement. In fact, there are many different ways that employees of both U.S. and European airlines have chosen to organize (or not to organize) themselves, and thus far, no government has found those to be an indicia of a lack of fitness, The Notice sets forth clearly that there is no tradition in the NAS companies o f discouraging unionization , and there is no basis to presume that it will be changed for the employees of Nal. There is not a single labor law standard in the U.S.-ED Open Skies Agreement under which all carriers must operate. The history of the agreement clearly demonstrates that it was

2 " Fo l lowing an inten s ive i ntern ati on al audi t b y ICA O in 2 0 I 0 , Ire land wa s ranke d amo ng th e best in the w orl d i n the saf ety over si g ht of civil av i ation
. Ire l and w as placed in the top ten countries w orldwide ah ead o f co untri es like th e United State s . Brazil and Australi a and ranked third of the twenty-two Europe an state s that had completed their audit at that time. " A bollt the Irish Aviation Authority, bttps://www.iaa.ie/about-iaa
. 3intended to permit application of the individual national laws governing employee/employer relationships , rather than to set up a single trans-Atlantic labor standard. While some participants in the talks did seek for the U.S. to submit itself to a single labor standard along with Europe , that view did not prev ail. Article 17(2) bis instead references "labor standards
or the labor-related rights and principles contained in the Parties' respective law s," recognizing the continuing governance of each side's carriers by their own national labor laws. For the U.S. to hold otherwise would be the worst kind of revisionist history. It also would open a door that U.S. employees might later regret . If the U.S. can question European labor practices, what would stop the EU or other aviation partners from questioning U . S
. airlines' labor practices? FedEx believes that a rejection of this application is being sought by some that would seek to turn back the movement of aviation liberalization in the U.S. generally. One filing specifically asks that this application be rejected because "U.S. carriers ' competitive positions would be unf airly an d unlawf

ully compromised by approval of the NAI scheme. " 3 We are not clear as to how the "unlawful" issu e is propounde d, because this is the fi nal argument put forward by the repliers and there is no further explanation. But the "unfair" complaint is familiar · from recent public dialogue on airline competition. It appears to be grounded in a special definition of " unfair"

- as being anything that U.S. carriers choose not to do

- rather than rooted in the traditional aviation law definition of "unfair " competitio n

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# ! 3 J oint Rep ly of D e lta Air Lin e s. In c . . United Airl i nes. Inc .. Ameri can Airlines. Inc. and U S Airw ays, Inc . . D oc ket D OT

O S T -2013

- 0204 , De c ember 20 , 201 3
.being "discriminatory.t'" Having benefited from opening up non-U.S. markets to U.S. carrier competition, some commentators in the docket would now seek to stop reciprocal market liberalization for carriers seeking to serve the U . S., under the guise of "fair competition." FedEx believes that open markets will inevitably produce a variety of business models , of employment models and of corporate models
. Those are not grounds for rejection under this liberalized agreement and to hold otherwise would be to turn back the clock on U.S. market openings
. At a time when the U . S
. is seeking to open access to European markets through trade agreements such as the Trans-Atlantic Trade and Investment Partnership and the Trade and Investment in Services Agreement, the U . S. Government would be foolish to seek to close the door already opened in aviation by the U.S.-EU Open Skies Agreement
. Moreover, not only would it send a message of protectionism to our most favored trading partners in Europe, it would also inform other aviation partners , both those already patty to other Open Skies agreements and those still considering them, that the U . S
. is advocating market openings only when it is the foreign markets that are opening to U . S. carriers, That seems to be the message from some filings in this docket

- perhaps an example of "buyer's regret" when foreign carriers turn out to be able and even innovative competitors. U . S. carriers must be prepared to compete with all types of carriers. Over the past twenty years, U.S. carriers have competed with operators with differing pricing and cost structures, including those that are the beneficiaries of special monopolies and privileges and those that
are the "national champions." The consumer has consistently benefited, and U.S carriers remain the best in the world. FedEx continues to believe that Open Skies

- and beyond Open

4 A "fair and equal opportunity to compete" is a concept recognized in the U.S-EU Open Skies Agreement, see e.g. Article 14. However, that concept it is clearly applicable only in a situation where a country grants to its own carriers greater rights than it grants to foreign carriers. That is not the situation here. 5Skies

- is the best policy to benefit US. passengers and shippers, who are and should remain the primary bene f

iciaries of U.S
. international aviation policy. FedEx (and its customers) benefit greatly from the US-EU Open Skies agreement and other Open Skies agreements , as do all U.S
. carriers that operate internationally. We utilize the open Fifth Freedom rights, liberal change-of-gau g e capabilities, intermodal rights and operational f

lexibility provisions contained in those agreements. OUT hub-and-spoke system could not function outside the U.S. without the grant of those rights. Using those rights, FedEx has created a global network of U S-operated fli ghts, u s ing U.S. crews and covered under U.S. safety and security regulations. In Europe, we have multiple locations in Member States where those rights allow us to connect points within Europe and beyond it to OUT U.S. and Asia hubs. We would strongly oppose any action by the Department that could
cause other nations to "limit the benefits of the US-EU Open Skies Agreement or which might invite a restrictive reading of its terms by others. FedEx contends that NAI should be permitted into the US. m arketplace, as an airline supervised by a highly competent safety regulator, and as an airline which seeks to create U.S. jobs, purchase US
. products and offer US. consumers an innovative service. We also believe that a failure to approve the NAI appli cation will result in a crisis of confidence in the US. push for air servic e s liberalization. As an airline that has always backed deregulation and its international equivalent, liberalization , FedEx urges the Department not to convert the U S.-EU liberalizing agreement into a weapon to stop certain airlines f rom serving the U.S. market. Instead , the US. should support the agreement by refusing to penali z e a carrier that operates in a different manner from models presently in the trans-Atlantic arena . After that, only ti me - and the marketplace

- will decide ifNAI can succeed. 6Respectfully submitted, FEDERAL EXPRESS CORPORATION

Isl Nancy S
. Sparks Nancy S. Sparks Managing Director Regulatory Affairs

7CERTIFICATE OF SERVICE A copy of the foregoing Answer has been served this 12th day of February, 2014, upon the following persons via email: romanow@pillsburylaw.com peter.nelson@pillsburylaw.com russell. bailey@alpa.org steve.mon·issey@united
. com dan. weiss@united.com sascha. vanderbellen@delta.com howard.kass@usairways.com robert.wirick@aa.com francis.heil@aa.com robert.land@jetblue.com Ipommer@atlasait·.com anita.mosner@hklaw.com jennifer.nowak@hklaw.com mlbenge@zsrlaw.com dberg@airlines.org j casey@airlines.org kglatz@airlines.org cbethke@airlines.org edw@ttd.org ejames@jamhoff.com clytle@portoakland.com kgeorge@broward.org mrichardson@swapa.org sshur@traveltech.org jesse.elliot@faa.gov douglas.schwab@faa.gov nicholas.tsokris@faa.gov john.allen@faa.gov paul.gretch@dot.gov brian.hedberg@dot.gov reese . davidson@dot.gov esta.rosenberg@dot.gov brett.Ia.-uger@dot.gov ursIa.-@state.gov CristinaSA@state.gov Eugene.alford@trade.gov info@ait-lineinfo.com 

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