BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, DC

)

Application of )

) Docket No. OST

‐ 2013

‐ 0204

NORWEGIAN AIR INTERNATIONAL )

LIMITED )

)

for an exemption under 49 U.S.C. § 40109 )

and a foreign air carrier permit pursuant to )

49 U.S.C. § 41301 (US

‐ EU Open Skies) )

)

JOINT REPLY OF AIR LINE PILOTS ASSOCIATION,

TRANSPORTATION TRADES DEPARTMENT, AFL

‐ CIO

AND THE EUROPEAN COCKPIT ASSOCIATION

TO COMMENTS ON DOT’S JANUARY 30 NOTICE

Edward Wytkind, President

Transportation Trades Department,

AFL

‐ CIO

815

– 16th Street NW

Washington, DC 20006

Phone: 202

‐ 628

‐ 9262

Fax: 202

‐ 628

‐ 0391

Email: edw@ttd.org

Philip von Schöppenthau,

Secretary General

European Cockpit Association

Rue du Commerce 20

‐ 22

B

‐ 1000 Brussels

Belgium

Phone: 32

‐ 2

‐ 705

‐ 3293

Fax: 32

‐ 2

‐ 705

‐ 0877

Email: pvs@eurocockpit.be J onathan A. Cohen

Russell Bailey

David M. Semanchik

Air Line Pilots Association

1625 Massachusetts Avenue NW

Washington, DC 20036

Phone: 202

‐ 797

‐ 4086

Fax: 202

‐ 797

‐ 4014

Jonathan.Cohen@alpa.org

Russell.Bailey@alpa.org

David.Semanchik@alpa.org

Attorneys for Air Line Pilots Association

Dated: February 21, 2014BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, DC

)

Application of )

) Docket No. OST

‐ 2013

‐ 0204

NORWEGIAN AIR INTERNATIONAL )

LIMITED )

)

for an exemption under 49 U.S.C. § 40109 )

and a foreign air carrier permit pursuant to )

49 U.S.C. § 41301 (US

‐ EU Open Skies) )

)

JOINT REPLY OF AIR LINE PILOTS ASSOCIATION,

TRANSPORTATION TRADES DEPARTMENT, AFL

‐ CIO AND THE EUROPEAN

COCKPIT ASSOCIATION TO COMMENTS ON DOT’S JANUARY 30 NOTICE

The Air Line Pilots Association, the Transportation Trades Department and the

European Cockpit Association 1 hereby submit the following reply to the comments that

have been filed in response to DOT January 30 Notice. The Notice requested comments

on the written “Summary of Information provided by the European delegation” (“DOT

Summary”) pertaining to the current and planned long

‐ haul operations of Norwegian

1 The Air Line Pilots Association (“ALPA”) and the Transportation Trades Department,

AFL

‐ CIO (“TTD”) and the European Cockpit Association (“ECA”) are referred to jointly

as the “Labor Parties.”2 Air Shuttle ASA and its affiliated companies, Norwegian Long Haul AS and Norwegian

Air International. 2

As shown by Labor Parties’ earlier filings in the proceeding, and as shown

below, NAS/NAI is using an opportunity created by the ATA to undermine labor

standards and principles contained in the laws of Parties to the Agreement in a manner

that is inconsistent with the public interest and Article 17 bis of the ATA. Given that

Ireland has now granted NAI operating authorization, DOT should notify the

aeronautical authorities of Ireland that it believes the conditions prescribed in Article 4

of the ATA for the grant of appropriate authorizations have not been met and intends to

deny. See ATA Article 6 bis. Should the European Commission or a Member State seek

consultations under ATA Article 6, the Department should be prepared to require the

Norwegian Group to respond to the attached Request for Information and Documents

(Attachment 1 hereto). In addition, the Department should be prepared to ask Norway,

Ireland and the Commission to respond to the question set forth in ALPA’s Answer to

DOT’s Notice (at 16

‐ 17).

2 Norwegian Air Shuttle ASA (“NAS”) and its affiliated companies, Norwegian Long

Haul AS (“NLH”) and Norwegian Air International (“NAI”) will be referred to as the

“Norwegian Group.”3 DISCUSSION

The evidence submitted by the Labor Parties’ and other parties in this

proceeding demonstrates that approval of NAI’s application for a foreign air carrier

permit would not be consistent with the public interest and Article 17 bis of the ATA.

Nothing in the February 13 Comments of NAI (or in any other submission submitted in

response to DOT’s January 30 Notice) detracts from that conclusion.

1. THE RECORD EVIDENCE SHOWS THAT NAS HAS ESTABLISHED NAI

AS AN IRISH COMPANY IN ORDER TO AVOID NORWEGIAN LAW.

The record evidence shows that NAS has established NAI outside of Norway to

avoid Norwegian laws. ALPA Answer to Application of NAI (“ALPA Answer”) at 3 &

Exs. 4

‐ 6; Declaration of Jack Netskar (“Netskar Dec.”) ¶ 12 (filed with ALPA’s Answer);

Answer of PARAT to DOT Notice (“PARAT Answer”) at 3 & Appendix 1.

NAI states that “the EU delegation conveyed explicitly and correctly Norwegian

International ‘chose Ireland because as an Irish carrier it would have access to

significant additional traffic rights not available to it as a Norwegian carrier, access to

additional financing options under OECD rules, and access to insurance and financing

rebates because Ireland is a Cape Town Convention Signatory.’” Comments of NAI to

DOT Notice (“NAI Comments”).

As a preliminary matter, it is important to note that no matter what the

Norwegian Group’s reasons for establishing a subsidiary are, if that act undermines the4 labor standards and labor

‐ related principles in the Parties’ laws, it is inconsistent with

Article 17 bis

. But the Labor Parties’ February 14 Answers to DOT’s Notice also showed

why each of these asserted reasons is insubstantial and appear to be manufactured only

to respond to the opposition to NAI’s application. As far as the Labor Parties are aware,

these reasons never appeared publicly until this case began. They are inconsistent with

news reports that repeatedly gave the reason that NAS would move its long

‐ haul

operations out of Norway to avoid Norwegian laws. ALPA Answer at 4 & Exs. 7

‐ 9;

Netskar Dec. ¶ 10. They are also inconsistent with what the Royal Norwegian Ministry

of Transport and Communication says about NAS’s reasons: NLH had, in a letter to the

Ministry, “been very clear about that the company’s planned moving of its long haul

activity to Ireland is due to [the fact] that the Norwegian immigration legislation was

not amended.” PARAT Answer Appendix 2 at 2 (translation). No other reason was

mentioned. The legislation that NAS/NLH sought to have amended requires that

Norwegian labor legislation applies to employees on board Norwegian aircraft. Id

. 3 In

face of this overwhelming evidence, there can be little doubt that NAS sought to

establish its long

‐ haul operations outside of Norway to avoid the application of

Norwegian labor laws to its air crew. However, should NAI continue to contest this

point, DOT should require the Norwegian Group to provide the information and

3 Norway has granted NLH a temporary exemption from this requirement that permits

it to operate two Irish registered aircraft. These exemptions are scheduled to expire on

June 24 and August 24, 2014. DOT Summary at 1.5 produce the documents specified in the Request for Information and Documents

attached to this Reply.

2. ESTABLISHMENT OF NAI AS AN IRISH CARRIER UNDERMINES THE

LABOR

‐ RELATED STANDARDS AND PRINCIPLES CONTAINED IN THE

LAWS OF NORWAY AND THE U.S.

A. Norway is a Party to the ATA.

NAI appears to argue that the only law that the Department should look at is EU

or U.S. law. NAI Comment at 7

‐ 8 and n.21. If that is what NAI is arguing, then it is

incorrect on this score. The term “Party” in the Agreement means “the United States,

the European Union and its Member States, Iceland and Norway.” U.S

‐ EU (Iceland,

Norway) Air Transport Agreement, June 21, 2011(emphasis added). 4

B. NAS’s Establishment of NAI as an Irish Carrier Will Undermine the

Standards and Principles in Norway’s Employment Laws.

ALPA has shown that “but for” the ATA, NAS could not own and control a

subsidiary in Ireland. ALPA Answer at 7

‐ 8. The use of this opportunity afforded by the

ATA is not to be used to undermine the standards and principles in Norway’s laws. Id

.

The very fact that NAS is attempting to move its long

‐ haul operations out of Norway

undermines the standards and principles in Norway’s labor laws

.

NAI asserts that the European delegation provided DOT with “detailed

information on salaries and working conditions that clearly demonstrate that

4 This document is available at http://www.state.gov/e/eb/rls/othr/ata/i/ic/170684.htm

.6 Norwegian will, in fact, promote

– not undermine

– ‘high labor standards.’” NAI

Comments at 4. They also claim that “EASA regulations prescribe the working

conditions on all Norwegian International flights” and that, “in conformity with the

Rome Convention and EU Regulation 593/2008, Norwegian International applies the

law of the country where an employee is hired and based to that person’s employment

relationship with the Company.” NAI Comments at 7

‐ 8. NAI then goes on to assert

that “the majority of employees employed by Norwegian International’s affiliated

companies are unionized and, that as the EU delegation recognized

. . . the Norwegian

group has ‘no tradition of discouraging unionization.’” Id

. at 8.

These assertions do not hold up under scrutiny.

The European delegation did not provide the U.S. with “detailed salary and

working conditions.” The salary information provided by the EU delegation was a

chart that showed what purported to be “dollarized average gross payments” for

certain flight crew categories of Norway, Spain, Thailand and the U.S. DOT Summary

at 2. There is no source given for the numbers and there was no indication whatsoever

as to how the numbers were calculated. As ALPA and ECA pointed out, the numbers

appeared to be something other than total compensation and, at least for pilots, a first

step in evaluating the total compensation would be to reduce the Thailand numbers and

raise the Norway, Spain and U.S. numbers by 20

‐ 25 percent to account for pension and7 other social costs. ALPA Answer to DOT Notice at 7

‐ 8; ECA Answer to DOT Notice

at 4

‐ 5.

As for working conditions, there was no mention of them in the information

presented by the European delegation. All that NAI offers here is that EASA

regulations would prescribe some working conditions during NAI’s flights. But the

EASA regulations only have to do with safety requirements, not with working

conditions. Commission Regulation (“EU”) No. 1178/2011, 3 Nov 2011 (laying down

technical requirements and administrative procedures related to civil aviation aircrew).

“Working conditions” or “conditions of employment” as the idea appears in Norwegian

and U.S. labor law, embrace a much wider range of matters: e.g. retirement programs,

medical coverage, the way work is performed, vacations, days off, requirements for

layover and training accommodations, bidding rights and the like. In addition, the

EASA safety rules, as with FAA regulations, are minimum standards that can be

improved upon in collective bargaining. The NAI flight crew will be deprived of

bargaining over these matters by virtue of NAS’s unilateral decision to move its long

‐

haul operations out of Norway and put them under an Irish AOC. This undermines the

labor standards and principles in Norway’s labor laws.

The assertion that the Norwegian Group has “no tradition of discouraging

unionization” similarly lacks merit. PARAT

– the union for NAS’s pilots and flight

attendants

– has convincingly shown that NAS has engaged in a systematic effort in the8 last few years to discourage unionization and this effort has resulted in the portion of

NAS employees who are unionized dropping from nearly 96 percent to under 50

percent. PARAT Answer at 5 & Appendix 2. And, of course, no NLH/NAI aircrew are

represented by unions: the employment relationship is set up in a way to preclude that

result. Finally, the European delegation did not “recognize” that NAS had “no tradition

of discouraging unionization.” The delegation merely passed on information that NAS

had provided it. It turns out that the information was misleading or, more accurately,

incorrect.

NAI’s claims that it “applies the law of the country where an employee is hired

and based to that person’s employment relationship to the company,” NAI Comments

at 7

‐ 8, and that it recruits pilots and flight attendants “in the local markets where they

are based,” id

. at 6, are also problematic. These statements raise more questions rather

than provide answers and highlight the problems with the Norwegian Group business

model. In which “country” are the pilots “hired and based?” Is it the law of one, two,

or even more countries that applies to the employment relationships? The long

‐ haul

pilots must all hold EASA licenses and European passports. Answer of ECA to NAI

Application at 5 & attached NLH/NAI recruitment advertisement. So they are recruited

and maybe even “hired” in one or more European countries. But their employment

contracts are with a Singapore employment company and the contracts are governed by

Singapore law. So, are they “hired” there? Basing is another matter, and it certainly9 appears that wherever NLH/NAI pilots might be hired, they are not, unless by

happenstance, based there. According to the recruitment advertisement the pilots will

be based not in Europe, not in Singapore (where, incidentally, none of the Norwegian

Group even offers air service), but in Thailand. Id

. Similarly, the NLH/NAI pilots are

not recruited in the local markets where they will be based as they are recruited in

Europe, not in Thailand. So there is no “country” where a pilot is “hired and based.”

So which country’s (or countries’) laws apply to a pilot’s relationship with the

company? And if it is more than one country’s laws, to which aspect of the

employment relationship does each country’s law apply? Unless DOT does not grant

NAI’s application at this juncture

– which it should not

– the Department should find

out the answers to these questions before it makes a final determination on the

application. See attached Request for Information and Documents.

4. NAI DOES NOT SATISFY ALL THE APPLICABLE REQUIREMENTS FOR

RECEIVING A FOREIGN AIR CARRIER PERMIT.

NAI suggests that it has satisfied all the applicable requirements to receive a

foreign air carrier permit that its application is consistent with precedent and that DOT

should “now promptly grant” its permit. NAI Comments at 3, 9. But the very authority

NAI cites in support of these arguments shows that where it is appropriate

– as the

record in this proceeding amply shows it is

– DOT is required to take a close look to

determine whether the grant of a particular permit is in the public interest.10 Thus, NAI cites (1) a House report that says that “[i]n most of these cases, there

are no substantial issues,” and so a grant of authority is in the public interest in those

cases, NAI Comments at 9; (2) Article 4 of the ATA which refers to the “‘conditions

. . .

normally applied to the operation of international air transportation,’” id

. at 10; and

(3) Article 6 bis of the ATA which states that a Party will not look into an applicant’s

fitness and ownership unless the Party has “a specific reason for concern

. . . that the

conditions prescribed in Article 4

. . . have not been met,” id

. As ALPA and ECA have

shown, NAI’s application is not “most cases,” that the Norwegian Group business

model provides a “specific reason for concern,” and that “the laws and regulations

normally applied” contain a public interest test that dictates that NAI’s application

should not be granted.

While the ATA established a recognition proceeding for fitness determinations,

fitness is only one criterion an applicant must meet. Consistency with the public

interest is another, as is consistency with the ATA, and there is no mutual recognition

procedure for these determinations.

As for NAI’s assertion that the application is consistent with precedent, the

response is simple: There is no precedent for NAI’s application. This is the first time

DOT has been presented with clear evidence of an applicant whose business plan, if

allowed to proceed, would undermine the principles of Article 17 bis of the ATA.11 5. THE LABOR PARTIES DO NOT CONTEND THAT THE ATA CREATED

NEW LABOR STANDARDS; RATHER ARTICLE 17 BIS WAS DESIGNED

TO DETER AND PREVENT THE USE OF OPPORTUNITIES MADE

AVAILABLE BY THE AGREEMENT TO UNDERMINE THE PARTIES’

EXISTING LABOR STANDARDS AND LABOR

‐ RELATED PRINCIPLES

.

NAI argues that Article 17 bis “does not create new labor standards or override

the existing laws, regulations, and practices of either the EU and its Member States or

the U.S. that address airline employment and labor issues.” NAI Comments at 8.

ALPA and ECA do not contend that it does.

Rather, we contend that Article 17 bis is intended to do is just what it says

– to

deter and prevent the use of opportunities made available by virtue of the ATA to

undermine the existing laws, regulations and practices of the Parties that address labor

and employment law.

The negotiating history of Article 17 bis is set forth in ALPA’s Answer. ALPA

Answer at 7

‐ 13 & Exs. 16

‐ 24. This history is supplemented and fully corroborated by

the Declaration of Martin Chalk (“Chalk Dec.”) (Attachment 2 hereto), the President of

the European Cockpit Association from 2005 to 2011, a period that covers the time in

which the labor concerns addressed by Article 17 bis were considered at length by the

EU and U.S.

The ECA was a stakeholder that participated as a member of the EU delegation

at every negotiating session and every Joint Committee meeting during that time period12 and Mr. Chalk either participated personally or oversaw ECA’s participation in

meetings. He demonstrates that:

(1) The elimination of the nationality clause and the “European carrier

concept” raised a “question of major importance for airline workers both in the

EU and the U.S.” because the “EU had no EU

‐ wide law that governs critical

aspects of the employment relationship for airline workers.” Chalk Dec. ¶ 5.

(2) Of particular concern to EU and U.S. airline workers was that the EU had

no EU

‐ wide law that governed the selection of employee representatives or the

negotiation and enforcement of collective bargaining agreements. These matters

were, instead, left to the national laws of the Member States. Id

. ¶¶ 5, 6.

(3) The labor representatives to the negotiations were concerned that this

fragmented legal structure could lead to “forum shopping” by European airlines

to take advantage of more favorable labor standards in another Member State.

Id

. ¶ 13.

(4) The EU

‐ wide laws “were perceived as part of the problem because they

were complex, vague, and difficult to apply, and served to encourage, rather

than discourage,” the problem that the labor parties sought to address. Id

. ¶ 13.

(5) The EU examined the fragmentation/forum shopping issues closely, both

in two special “labor forms” and in an analysis undertaken by a specially

appointed expert. Id

. ¶ 14.

(6) In order to be responsive to the fragmentation/forum shopping concern,

the EU proposed including a provision in the ATA that addressed this issue. The

EU proposal, after ratification at the negotiating table, eventually became

Article 17 bis of the Agreement: a “succinct but flexible provision that was

designed to address the forum shopping concern.” Id

. ¶ 15.

(7) Article 17 bis “has, and had, no other function than to prevent an airline

using their preferred labor regulations in one country from undermining the

labor rights in another.” Id

.

Mr. Chalk concludes with a question: If Article 17 bis is not clearly designed to

prevent forum shopping, what is it intended to prevent?13 In short, we are asking to have the Agreement interpreted in accord with its plain

meaning and intent.

We would encourage the European Commission, Norway and Ireland to

reconsider their views in light of this negotiating history and in view of the fact that

many components of the Norwegian Group’s “story” that the European delegation

delivered on its behalf are incomplete, misleading and/or false.

6. THE PARTIES SUPPORTING NAI’S APPLICATION DO NOT ADDRESS

THE CORE CONCERNS OF ALPA AND ECA

.

The supporting third

‐ parties to NAI’s application (City of Orlando, Visit

Orlando, Orlando Airport, Orange County, Florida; Broward County Aviation

Department; Washington Airports Task Force: Port of Oakland; Travel Technology

Association; Irish Minister of Transport; Norway’s Transport Ministry; the European

Low Fare Airline Association Federal Express Corp.) do not address, the fundamental

labor concerns at the core of the Labor Parties’ opposition.

One naturally expects the airports, their communities, and travel industry

groups to favor new service because these serviced are perceived to benefit them. But

none of these parties have addressed the undermining of labor standards that the

Norwegian Group’s business plan would bring. Moreover, none has addressed the fact

that implementation of Norwegian’s business plan would put U.S. carriers such United,

Delta, and American and their employees at a competitive disadvantage. The Labor14 Parties have not opposed the many applications of EU carriers for new authority which

the ATA has made possible but we are confronted here with a business model that the

Agreement was designed to deter. The Department should view these expressions of

support to be inapposite.

Similarly, the Irish and Norwegian transport ministries do not meaningfully

address the Labor Parties’ labor concerns. In his letter, the Norwegian Transport

Minister makes a passing reference to the labor article and suggests that whatever the

Labor Parties’ concerns may be they can be handled after NAI’s application is

approved. This position seems at odds with the Minister’s letter to the European

Commission discussing the labor fragmentation challenges confronting the EU and its

Member States. ALPA Answer Attachment 2 (Ketil Solvik

‐ Olsen letter to Siim Kallas)

ALPA Answer to DOT Notice at 13). The concerns set out there would seem to be

arguments that would support addressing the challenges before, rather than after, the

Norwegian Group model is placed in operation in the trans

‐ Atlantic market.

The Irish letter is devoted in large measure to discussing the Irish authorities’

safety record. The Labor Parties’ recognize the IAA’s record of competence with

respect to aviation oversight and have not raised safety oversight issues in this

proceeding.

The European Low Fare Airline Association (“ELFAA”) counts NAI’s parent,

Norwegian Air Shuttle, as a member. See http://www.elfaa.com/members.htm

, last15 visited Feb. 21, 2014. It dismisses the concerns of the opponents of NAI’s application as

“defensive, protectionist concerns” which are outweighed by a “desperate[] need [for]

the availability of low fares,” ELFAA letter at 3, but provides no legitimate reason for

sweeping Article 17 bis aside.

Finally, with respect to the filing by Federal Express Corporation, ALPA

understands, and is sympathetic to, the fact that FedEx’s international business is built

upon the existence of liberal traffic rights for cargo as embodied in Open Skies

agreements generally. But the Parties to the ATA expressed their intent that the

opportunities made available in the Agreement are not to be used in a particular way.

NAI’s business plan is unique and unprecedented. Denial of its application should not

affect legitimate expectations of other carriers under the ATA or other air service

agreements.

CONCLUSION

We recognize that fare competition can be a good thing, so long as it is carried

out in accordance with law. But as shown in the Labor Parties’ filings throughout this

proceeding, the Norwegian Group’s service proposal is starkly at odds with the U.S.

‐ EU

Air Transport Agreement.

The CEO of NAS, Bjorn Kjos, was recently quoted touting the benefits of low

‐ cost

service verses the potential adverse effect on the quality and quantity of airline jobs

saying, “If I was a politician, I wouldn’t give a shit about the airline side.” Gwyn16 Topham, How are Norwegian Air Shuttle’s low

‐ cost US flights financially possible?

, The

Guardian, Feb. 4, 2014, at 3. 5

DOT should not accept Mr. Kjos’s invitation. Such an approach is plainly

unacceptable.

DOT should notify the aeronautical authorities of Ireland that the conditions

prescribed in Article 4 of the ATA for the grant of appropriate authorizations have not

been met and that DOT intends to deny the application. Further, should the EU or a

Member State seek consultations under Article 6 of the ATA, DOT should require the

Norwegian Group to respond to the attached Request for Information and Documents.

In addition, DOT should be prepared to ask the European Commission, Norway and

Ireland to respond to the information requests set forth in ALPA’s Answer to DOT’s

Notice.

Respectfully submitted,

[signatures on following page]

________________________________ Jonathan A. Cohen

Russell Bailey

5 This document is available at

http://www.theguardian.com/business/2014/feb/04/norwegian

‐ air

‐ shuttle

‐ low

‐ cost

‐ gatwick

‐ bjorn

‐ kos

.17 David M. Semanchik

Air Line Pilots Association

1625 Massachusetts Avenue NW

Washington, DC 20036

Phone: 202

‐ 797

‐ 4086

Fax: 202

‐ 797

‐ 4014

Email: Jonathan.Cohen@alpa.org

Email: Russell.Bailey@alpa.org

Counsel for Air Line Pilots Association

/s/ Edward Wytkind

Edward Wytkind, President

Transportation Trades Department,

AFL

‐ CIO

815

– 16th Street NW

Washington, DC 20006

Phone: 202

‐ 628

‐ 9262

Fax: 202

‐ 628

‐ 0391

Email: edw@ttd.org

February 21, 2014 /s/ Philip von Schöppenthau

Philip von Schöppenthau,

Secretary General

European Cockpit Association

Rue du Commerce 20

‐ 22

B

‐ 1000 Brussels

Belgium

Phone: 32

‐ 2

‐ 705

‐ 3293

Fax: 32

‐ 2

‐ 705

‐ 0877

Email: pvs@eurocockpit.be

CERTIFICATE OF SERVICE

I certify that I have, on this 21st day of February, 2014, served the foregoing Joint

Reply of Air Line Pilots Association, Transportation Trades Department, AFL

‐ CIO, and18 the European Cockpit Association and to Comments on DOT’s January 30 Notice by

causing a copy to be sent by electronic mail to the addresses identified below:

romanow@pillsburylaw.com

peter.nelson@pillsburylaw.com

steve.morrissey@united.com

dan.weiss@united.com

sascha.vanderbellen@delta.com

howard.kass@usairways.com

robert.wirick@aa.com

francis.heil@aa.com

michael.whitaker@faa.gov

jesse.elliot@faa.gov

douglas.schwab@faa.gov

nicholas.tsokris@faa.gov

john.allen@faa.gov

urskr@state.gov

westphalkl@state.gov

leo@washingtonairports.com

sschembs@cwa

‐ union.org

john.hanlon@elfaa.com

dberg@airlines.org jcasey@airlines.org

kglatz@airlines.org

clytle@portoakland.com

kgeorge@broward.org

mrichardson@swapa.org

ejames@jamhoff.com

eugene.alford@trade.gov

matthew.baldwin@ec.europa.eu

felix.leinemann@eeas.europa.eu

david.batchelor@sesarju.eu

ottar.ostnes@sd.dep.no

paul.gretch@dot.gov

robert.finamore@dot.gov

nssparks@fedex.com

dpdean@jamhoff.com

vegard.einan@parat.com

thore.selstad.halvorsen@parat.com

minister@dttas.ie

Russell Bailey

# ATTACHMENT 1REQUEST FOR INFORMATION AND DOCUMENTS

General Instructions

1. The following definitions of terms used in this request apply:

A. “Documents” is used in the broadest sense and includes, but is not limited

to, all writing, communications, drawing, graphs, charts, records, audio and visual

recordings, and all written, printed, typed, electronic, computerized or graphic matter

or other tangible things, of every kind and description, however produced or

reproduced, whether draft or final, original or reproductive, signed or unsigned, in the

possession, custody, or control of Norwegian Air Shuttle AS, Norwegian Long Haul AS

and/or Norwegian Air International Limited or their respective officers, agents,

employees, members, partners, attorneys, experts, consultants, participants,

stakeholders, other representatives, and any other person acting on behalf of it.

B. “Concerning” means that which refers to, mentions, relates to, reflects,

contains, embodies, summarizes, describes, discusses, responds to, has been made

available to, comments upon or in any manner pertains to the subject matter of the

request in whole or in part.

C. “And” and “or” mean “and/or” and “any” and “all” mean “any and all.”

“Including” means “including but not limited to.”

D. Terms in the singular include the plural and terms in the plural include

the singular. The present tense includes the past and future tenses.

E. “Norwegian Group” refers to Norwegian Air Shuttle AS, Norwegian

Long Haul AS, Norwegian Air International Limited and/or any corporate affiliates as

well as their officers, directors, employees, agents, members, partners and other natural

persons or entities acting on behalf of them.

F. “Pilots” means airline pilots who are employed directly by Norwegian

Group or employed under contracts with Global Crew Asia Pte., Limited, or another

crew leasing company, for Norwegian Group as the client to operate Norwegian Group

aircraft.2 G. “Communication” means any oral or written utterance, notation, or

statement of any nature by and to whomever made, including but not limited to

correspondence, conversations, agreements, e

‐ mails, faxes, and other understandings

between or among two or more persons.

G. “Application” means the pleading captioned “Application of Norwegian

Air International Limited for a Foreign Air Carrier Permit” in Docket OST

‐ 2013

‐ 0204,

plus all of its exhibits, amendments and supplements.

Documents to be Provided

1. All documents concerning the discussion to cease having the long

‐ haul

operations of the Norwegian Group performed by a Norwegian air carrier.

2. All documents concerning the decision to have the long

‐ haul operations of

the Norwegian Group performed by an Irish air carrier.

3. All documents concerning the decision to have the Pilots who work

aboard the long

‐ haul flights of the Norwegian Group be covered by an employment

contract governed by Singapore law.

4. All documents concerning the decision to have the Pilots who work on

board the long

‐ haul flights of the Norwegian Group based in Thailand.

5. All documents concerning the scheduling of Pilots and provision of hotel

and other accommodations for Pilots in connection with Norwegian Group’s purported

Bangkok “base,” and concerning the scheduling of Pilots and provision of hotel and

other accommodations for Pilots during “Extended Outstation Layovers” in Europe.

6. All documents concerning communications between the Norwegian

Group with Thailand authorities about the establishment of a Pilot “base,” including

the provision of Thai work and/or residence permits for Bangkok

‐ based Pilots.

7. All documents concerning whether Norway’s laws would permit the

operation of Norwegian Group aircraft staffed by flight crew employed by a Singapore

company.

8. All documents concerning which countries’ laws apply to the aspects of

the various employment relationships between the Pilots who work on board the long

‐3 haul flights of the Norwegian Group, on the one part, and 1) Global Crew Asia Pte.,

Limited, and 2) any corporate entity of the Norwegian Group on the other.

9. All documents concerning the “dollarized average gross compensation

payments” that the European delegation provided to the U.S. delegation at the January

8, 2014 meeting of the U.S.

‐ EU Joint Committee.

Information

Please provide a clear statement of which countries’ laws apply to the specific

aspects of the employment relationship between the pilots who work on board the

aircraft in the long

‐ haul operations of Norwegian Group, on the one part, and (1) Global

Crew Asia Pte., Limited, or (2) any corporate entity within the Norwegian Group, on

the other.

# ATTACHMENT 2Declaration of Martin Chalk

1

. My name is Martin Chalk. I joined British Airways in 1988 after a short spell

with the Royal Air Force. I have flown regional turboprop, short-haul narrow

body and long-haul wide body aircraft including the Boeing 747-400 and

currently the Airbus A380

. From 1993 I have been an elected representative

within the British Airline Pilots' Association, BALPA, serving at local, company,

negotiating board, national board and European levels.

2. From 2005 to 2011 I served as the President of the European Cockpit Association.

ECA is the regional body for professional pilots, representing over 38,000 pilots

in nearly 40 European Countries. It is responsible for all technical and political

representation of professional pilots' interests at the European Institutions.

3. During the negotiations that led to the EU

- United States Air Transport

Agreement and the 2010 Protocol that amended that Agreement, ECA was a

designated labour representative on the European delegation

. In common with

the United States, the European Commission draws expert advice when

negotiating air transport agreements from all parts of the aviation industry,

including labour. During the time I was President of ECA, I oversaw the

development of ECA's position on the various matters discussed by the Parties to

the negotiations, including, specifically, how the matters of concern to ECA and

other labour parties should be addressed in the Agreement

. This task included

meeting or conferring frequently with the negotiators of various Parties to the

negotiations. In particular, I met or conferred frequently with the lead

negotiators for the European delegation

- Mr. Daniel Calleja

- and the Ll.S.

delegation

- Mr. John Byerly. I also met and conferred with the representatives

of many of the Member State Parties to the negotiations.

4

. Early on in the negotiations, the two sides agreed that, if an agreement was

reached, it would include the right of any airline of the European Union to serve

the United States from any point in Europe and would eliminate the "nationality

clauses" that were included in all the existing bilateral agreements between

European countries and the Ll.S. This represented a potentially significant

addition of rights for EU airlines because the existing bilateral agreements tied

the right to serve the Ll.S. to service from the home country of the EU airline and

the "nationality clauses" prevented the nationals of one EU Member State from

owning and controlling the airlines of another Member State. This idea of

eliminating the nationality clauses and allowing EU airlines to operate from any

point in Europe to any point in the Ll.S, was generally known as the "European



# r'carrier concept." It was crucial to allow the sort of consolidation in Europe from

which the U

. S

. industry had benefitted f ollowing deregulation in the late 1970s.

5. The proposal to eliminate the nationality clauses raised a question of major

importance for airline workers both in the EU and in the U.S. The EU had (and

still has) no EU w i de

- law that governs critical aspects of the employment

relationship for airline workers. In particular, there was no EU-wide law that

governed either the selection of an emp l oyee representative for a particular

category of airline employee (e.g., pilot or flight attendant), or the negotiation or

enforcement of collective agreements.

6. The lack of an EU law on these matters left them to the national laws of

individual Member States. Frequently (in fact, maybe in all cases), these national

laws did not apply beyond the territory of the individual Member State

.

7. The Parties to the air services negotiations did not propose to change this

employment law framework

. In other words, although an agreement might

create a "European carrier," it would leave in place the existing national

employment laws

.

8. The labour representatives were concerned that this fragmented legal structure

could lead to "forum shopping" by European airlines to take advantage of more

favorable l abour standards in another Member State. In pa r ticular, we were

concerned that the airline of one country might move its operations to another

country or might set up a subsidiary in another country to conduct some of the

parent company flight operations

. We were concerned that an agreement could

set up a regu l atory framework that would allow for "flags o f convenience' such

as those that dominate the maritime sector. We raised these concerns repeatedly

with the negotiators.

9. The AT A was signed in June 2007. This quickly became known as the "Frist

Stage Agreement" because the Agreement stated the Parties' intent to enter into

negotiations to amend the Agreement.

10. In late 2007, a lmost immediately after the First Stage agreement was reached,

British Airways (BA) established a wholly

- owned subsidiary in F rance. This

airline

- the wryly named "Open Skies Airlines"

- operated only from

continental Europe to the U

. 5. The British Airline Pilots' Association (BALPA)

sought to have its collective bargaining agreement with BA extended to the pilots

who were employed by Open Skies. BA refused this request and BALPAthreatened industrial action and eventually sued BA asking the court to find that

BA was required to negotiate with it o v er the terms and conditions of

employment for the Open Skies pilots

.

11

. BA responded to the suit by arguing that the "right of establishment" provision s

in European treaty law gave them the right to establish Open Skies Airlines in

France and that the operat i on was beyond the scope of British labour law and the

existing collective agreement between BA and BALPA. In light of previous case

law (Viking & Laval), BALPA withdrew its suit

.

12. When in mid-2008 the U.S. and the European Parties began negotiations to

amend the AT A, the labour representatives

- including ECA, ETF on the EU side,

and ALP A and the AFL-CIO on the Ll

. S, side

- strongly pressed the case that any

amendments must address the labour issues created by the First Stage AT A

. The

history of those efforts is set out in the Answer of the ALP A in th i s proceeding

.

We pointed expressly to Open Skies Airlines as an example of the type of

business operation that was of concern to us.

13. The labour representatives were concerned that the mobility of airline

operations could be used to undermine the labour standards in the national laws

of Member States through forum shopping. The labour representatives were not

concerned primarily about the possibi li ty that forum shopping might undermine

EU laws. The EU l aws were perceived as part of the problem because they were

complex, vague, difficu l t to apply, and seemed to encourage, rather than

discourage, the problem that the labou r representatives sought to address.

These views were communicated by ECA to the EU negot i ators on many

occasions

.

14. As described in ALPA's answer to NAI's application, the European Commission

worked to explore labour's concerns. The Commission held two labour forums

to address the concerns, and appointed an expert

- Mr. Claude Chene

- to

examine the concerns in detail. The forum shopping! flag of convenience

concern was a central issue in both the labour forums and Mr. Chene's report.

15. In the report, one overriding problem was identified. The issues of negotiation

and enforcement of a collective labour agreement and the election of

representatives were excluded by current EU Treaties from being legislated for at

EU level

. It therefore suggested palliative measures which might help alleviate

those concerns inc l uding the possibility of a preventative clause in the EU

- U

. s.

second stage agreement. Only a meaningful mechanism to address the forumshopping concern would have been acceptable to labour on either side of the

Atlantic

. The Commission put a proposal on the table that eventually became

Article 17 bis. This provision was a succinct but flexible provision that was

designed to address the forum shopping concern. Paragraphs 18 and 19 of the

Memorandum of Consultations that accompanied the 2010 Protocol amending

the ATA show that both the EU and the U.S. recognized that the issue which was

being addressed was the mobility / fragmentation issue posed by the first stage

ATA. (A copy of the MOC is attached.) As the Commission was seeking to

reduce the opposition of U.S. Labour to relaxation of U.S. ownership and control

of airlines legislation, a key EU negotiating target, this was designed to be bo t h

meaningful and address directly the forum shopping concept. It has, and h a d, no

other function than to prevent an airline using their preferred labour regulations

in one country from undermining the labour rights in another.

16. The British Airways OpenSkies Airline example was often quoted as the

challenge which needed addressing. The NAI example is worse, in that it exports

the jobs not just to a more management friendly EU State, but to a new

employment model in another part of the world altogether. If Arti c le 17 bis is not

c learly designed to prevent such a construction for employment; what sort of

arrangement is it designed to prevent?

17. I de c lare under penalty of perjury under the laws of the United State, that the

foregoing is true and correct to the best of my belief.

,It .J.

Executed in '~~ United Kingdom on February 20,2014.

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