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 COMMENTS OF AIR LINE PILOTS ASSOCIATION,

TRANSPORTATION TRADES DEPARTMENT, AFL‐CIO

AND THE EUROPEAN COCKPIT ASSOCIATION

ON DOT’S AUGUST 4 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

Jonathan 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:  August 18, 2014
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 COMMENTS OF AIR LINE PILOTS ASSOCIATION,

TRANSPORTATION TRADES DEPARTMENT, AFL‐CIO AND THE EUROPEAN

COCKPIT ASSOCIATION ON DOT’S AUGUST 4 NOTICE

The Air Line Pilots Association, the Transportation Trades Department, AFL‐

CIO, and the European Cockpit Association1 hereby submit the following comments in

response to DOT’s August 4 Notice regarding the views voiced by the Director of

Aviation of the European Commission’s Directorate of General Mobility and Transport

(“DG MOVE”) on the applicability of Article 17 bis of the U.S.‐EU Air Transport

Agreement (“ATA” or “Agreement”) to NAI’s application.  For the reasons set out

below, the Labor Parties believe that DOT should reject DG MOVE’s interpretation of

                                                 

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

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

collectively as the “Labor Parties.”
2

Article 17 bis and promptly deny NAI’s application for an exemption on the grounds

that approval would be inconsistent with the public interest and with Article 17 bis.  

With respect to NAI’s application for a foreign air carrier permit, DOT should also issue

a show cause order stating that it intends to deny NAI’s application for a permit on the

grounds that approval would be inconsistent with Article 17 bis.  If the Department

believes that it would benefit by having more information before it issues such an order,

it should issue document production requests, including those attached to the

February 21, 2014 Joint Reply of the Labor Parties to Comments on DOT’s January 30

Notice, and/or should hold a hearing at which representatives of NAI may be examined

about the founding and structure of the company, including the compensation and laws

that apply to Norwegian Long Haul’s (“NLH”) air crew and that will apply to NAI’s air

crew.

A. Preliminary Matter:  The Director Was Not Speaking on Behalf of Any

Party to the ATA.

The DG MOVE Director’s views were expressed in a meeting between a

delegation of European Commission officials and a U.S. delegation composed of

representatives from DOT and the Department of State and were given in response to a

request from the U.S. Government for views on the legal reasoning and applicability of

Article 17 bis.  Although DOT had announced that it was seeking the views of the  

European Union (see Thursday, July 10, 2014 e‐mail from Susan Kurland, DOT ID: 2014‐

0204‐0120), the views expressed by the Director are described, variously, as those of
3

“EC officials,” the “EC delegation,”2  “the EC,” “DG MOVE,” or just the Director

himself.  The Notice indicates that the Director also stated that DG MOVE was “in the

process of discussing the issues with representatives of the European Union Member

States, Iceland, and Norway, which are all parties to the Agreement.”  (Notice at 2).  

Thus, it appears that the Director was not speaking on behalf of any party to the ATA.

Finally, we are aware that numerous EU Member States do not share the legal

analysis of DG MOVE and several of them have informed DG MOVE that they do not

support DG MOVE’s backing of NAI.

B. The Views on Article 17 bis Advanced by the Director

According to the Notice, DG MOVE’s “key message” to the U.S. delegation was

that, “from [its] perspective,” Article 17 bis “cannot be referred to unilaterally by a Party

to refuse an authorization under Article 4 of the Agreement to an airline of the other

Party.”  (Notice at 3).  The Director also stated the “EC’s view” is that Article 17 bis does

not afford a legal basis for unilaterally denying an application under Article 4.  (Id. at 2).  

The Director asserted “DG MOVE” believes that if a party has a concern about

Article 17 bis “as a general matter” the only mechanism available is to raise the issue for

consideration by the Joint Committee under Article 18(4).  (Id.)  He also noted that if a

party wants to discuss Article 17 bis in the context of a particular foreign air carrier

                                                 

2  The European Commission delegation consisted of five officials from DG MOVE and

one from the Commission’s Legal Service.
4

application, it can avail itself of Article 6 bis (1)(a), which leads to consultations and, if

necessary, consideration by the Joint Committee.  (Id. at 2).  The Director also stated that

“DG MOVE believes” that, under certain circumstances, perhaps two parties could

decide together to deny an application using Article 17 bis on the grounds that an

application undermines labor‐related rights and laws.  (Id. at 3).

C. DOT Should Deny NAI’s Applications.

The Labor Parties believe that the views expressed by the Director miss the mark

in several key respects and that DOT has the right to unilaterally deny applications for

operating authorizations from EU airlines and to take Article 17 bis into account when

doing so.  

1. DOT Should Deny NAI’s Exemption Application as Inconsistent with

the Public Interest and with the Principles Set Out in Article 17 bis.

It is clear that DOT may deny unilaterally NAI’s application for an exemption.

Under Article 4(c) of the ATA an airline must “be qualified to meet the

conditions prescribed under the laws and regulations normally applied to the operation

of international air transportation by the Party considering the application or

applications.”  The principal law applied to applications for exemptions is 49 U.S.C.

§ 40109 (“Authority to exempt”) which, tellingly, the Director appears not to have  

addressed at all.  The statute provides, in pertinent part, that “the Secretary may exempt

to the extent that the Secretary considers necessary” a foreign air carrier from the
5

requirement to hold a foreign air carrier permit “when the Secretary decides that the

exemption is consistent with the public interest.”  49 U.S.C. § 40109(c).  

The “necessary” and “public interest” tests remain untouched by the ATA.  The

tests are statutory tests, and statutory requirements were not eliminated by the

Agreement.  Moreover, the U.S. Government expressly confirmed during the

negotiations, both in writing and orally, that the mutual recognition procedures for

fitness and citizenship determinations in Article 6 bis did not modify the conditions

prescribed under the laws and regulations normally applied by the Parties to the

operation of international air transportation referred to in Article 4 of the Agreement.  

See Memorandum of Consultations accompanying the Protocol to Amend the ATA ¶ 5.

Neither the “necessary” test nor the “public interest” test is met here.  

Grant of an exemption to NAI certainly is not necessary.  NAI’s parent company

Norwegian Air Shuttle (“NAS”) owns another airline subsidiary – Norwegian Long

Haul – that is a Norwegian air carrier holding permit and exemption authority from the

Department and that is conducting – on behalf of NAS – all the flight operations that

NAI proposes to conduct.   

A grant of an exemption to NAI would also not be consistent with the public

interest.

The record in the case shows that:
6

●  Norwegian Air Shuttle formed NLH with the intent to use flight crew

working under contract to a Singapore hiring firm who would not be

subject to Norway’s immigration and employment laws, but Norway

sought to have its employment laws apply to those crew members.  NAS

worked to avoid this from happening first by registering its aircraft in

Ireland and then by establishing a subsidiary air carrier – NAI – outside of

Norway to do the flying being conducted by NLH.

●  The pilots who operate NLH’s aircraft are employed not by NAS or NLH,

but by crew supply companies under individual employment contracts

governed by Singapore law.  They are fictitiously claimed to be based in

Thailand.  This is the same for pilots who would be operating NAI’s

aircraft.

●  The NLH pilots’ terms and conditions of employment are substantially

inferior to those that apply to the pilots employed by NAS.  This is the

same for pilots who would be operating NAI’s aircraft.  

●  The employment contracts that apply to the NLH pilots contain a term

that effectively prohibits those pilots from providing information about

their employment contract or NLH’s business to anyone.
7

●  NAI plans to take over the long‐haul 787 flying being done by NLH and

perform it permanently in the same manner as NLH is doing temporarily.3  

Among the policy objectives that DOT is to seek to achieve when determining  

whether proposed foreign air transportation is in the public interest is the

encouragement of “fair wages and working conditions.”  49 U.S.C. § 40101(a)(5).  

Another objective is “strengthening the competitive position of [U.S.] air carriers to at

least ensure equality with foreign air carriers.” 49 U.S.C. §§ 40101(a)(15) and (e)(1).  For

the reasons set out in ALPA’s December 17, 2013 Answer (at 4‐7), approval of NAI’s

application would be inconsistent with those public interest objectives.  

Whether a DOT licensing action is consistent with the provisions of an air

services agreement – in this case Article 17 bis – should also be part of the public interest

analysis.  In addition, as explained below, Article 17 bis is also a separate basis for

deciding to grant or deny operating authorizations to NAI.  

Article 17 bis reads:

Social Dimension

1. The Parties recognize the importance of the social dimension of the

Agreement and the benefits that arise when open markets are

accompanied by high labor standards.  The opportunities created by the

Agreement are not intended to undermine labour standards or the labour‐

related rights and principles contained in the Parties’ respective laws.   

                                                 

3  Norway has given NLH a series of temporary exemptions from the requirement that

Norway employment law is to apply to its flight crew.  
8

2. The principles in paragraph 1 shall guide the Parties as they implement

the Agreement, including regular consideration by the Joint Committee,

pursuant to Article 18, of the social effects of the Agreement and the

development of appropriate responses to concerns found to be legitimate.   

Significantly, DG MOVE recognizes that Article 17 bis can serve as the basis for  

denial of operating authority.  DG MOVE does contend that a denial based on Article 17

bis cannot be done unilaterally, but DG MOVE’s contention is based on an incomplete

reading of the article.  Read as a whole, Article 17 bis provides each Party to the

Agreement the ability to ensure, as it implements the Agreement, that opportunities

created by the Agreement are not used to undermine labor standards or labor‐related

rights and principles that contribute to the “high labor standards” that the Parties have

deemed to be beneficial to a liberalized trans‐Atlantic air services market.

The first phrase in paragraph 2 states that the principles established in

paragraph 1 “shall guide the Parties” as they implement the Agreement.  The Director

posits that this means implementation matters are to be dealt with “by ‘the parties’ and

not any one single party.”  (Notice at 2).  But here the word “Parties” clearly means

“each of the Parties” and the plural is used simply because there are multiple parties to

the Agreement.  Each of these “Parties” has an obligation to ensure that it implements

the Agreement in a way that is consistent with the principles in paragraph 1.  It is each

of these “Parties” that will be in the best position to identify its own “respective” labor

standards or labor‐related rights and principles that could be undermined by the use of  
9

opportunities created by the Agreement.  And it is each of these “Parties” that

“implements the Agreement” when it decides whether it is appropriate to grant

operating authorizations.   

The Director further contended if a Party has a concern about Article 17 bis as “a

general matter the only mechanism available under the Agreement is to raise the issue

for consideration by the Joint Committee. . . .”  (Notice at 2).  But the Director, again

tellingly, overlooks crucial words.  The principles in paragraph 1 are to guide the

Parties “as they implement the Agreement including regular consideration by the Joint

Committee, pursuant to Article 18.”  (Emphasis added.)  In other words, resort to the

Joint Committee is one path for ensuring that the principles set out in paragraph 1 are

effectuated.  And this makes sense.  The Joint Committee meets periodically and is not

in a position to take timely action when, as is the case here, a decision as to how the

Agreement is to be implemented must be taken under a statutory deadline.  (See pp. 10‐

11 below.)  In such a case, an individual Party must have the latitude to act on its own

to ensure that implementation of the Agreement is consistent with the principles in

paragraph 1.  The first phrase of paragraph 2 appropriately gives each Party that

latitude.   

The words “shall guide” are not merely hortatory; they are directive.  “Shall” is

“used in laws, regulations or directives to express what is mandatory.”  Merriam‐

Webster Dictionary, available at www.merriam‐webster/dictionary/shall; see Gonzalez v.
10

Thaler, 132 S. Ct. 641, 644 (2012) (“[t]he word ‘shall’ . . . underscores the rule’s

mandatory nature”).  “Guide” means “to direct . . . to a particular end.”  Merriam‐

Webster Dictionary, available at www.merriam‐webster/dictionary/guide.  Therefore,

“shall guide” provides marching orders for the Parties as they implement the

Agreement, whether they are acting individually or collectively.

Again, DOT is implementing the Agreement when it decides whether or not

NAI, under Article 4(c), is “qualified to meet the conditions prescribed under the laws

and regulations normally applied” to an exemption application.  While Article 4(c) does

not reference Article 17 bis, there is nothing in the Agreement that prohibits the articles

from being read together and it is natural that they should be, not the least because the

application of Article 4 forms an integral part of the “implementation” of the

Agreement, which is to be “guided” by the principles in Article 17 bis, paragraph 1.  See

Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995) (“cardinal principle of

contract construction [is] that a document should be read to give effect to all its

provisions and to render them consistent with each other).

Finally, DG MOVE’s position that DOT may not take unilateral action on NAI’s

exemption request, if adopted, would have unacceptable results.  As noted above at 4,

DG MOVE did not address the fact that 49 U.S.C. § 40109 provides a firm basis for DOT

to deny NAI’s exemption application.  To the extent DG MOVE is suggesting (see Notice

at 3) that DOT cannot deny an exemption without first consulting with the aeronautical
11

authorities of Ireland, it is advocating a view that would have the irrational and plainly

impermissible consequence of giving a foreign country – in this case Ireland – not the

DOT, the power to determine whether an exemption should be granted or not.  While

there is no statutory deadline for DOT to make a final decision on an application for a

foreign air carrier permit, there is a deadline to make a final decision on NAI’s

exemption request.  See 49 U.S.C. § 41710.4  If, as DG MOVE seems to argue, all DOT can

do is notify – either under Article 17 bis or Article 6 bis – the aeronautical authorities of

Ireland that the conditions prescribed in Article 4 of the Agreement for the grant of

appropriate authorization have not been met, then Ireland could draw out consultations

and Joint Committee consideration until the deadline.  Then, because, according to DG

MOVE, DOT could not unilaterally deny the application, the Department’s only

available course of action would be to grant the exemption.  Under the statute a

decision yea or nay is for the Department.  Allowing a foreign country a veto power

most certainly is not a result that could have been intended by Congress nor one that it

would be likely to countenance.   

2. NAI’s Foreign Air Carrier Permit Application Should Also Be Denied.

For the reasons set forth with regard to the exemption application, DOT should

deny NAI’s application for a permit as well.  DG MOVE says that Article 6 bis is an

                                                 

4  We understand that DOT is treating August 31 as a deadline for issuing a decision on

NAI’s exemption request.
12

available process in connection with foreign air carrier applications, but Article 6 bis

pertains to regulatory determinations with regard to airline fitness and citizenship, and

not to an assessment of whether approval of an applicant’s business model is consistent

with Article 17 bis.

5  

The Agreement and the March 2, 2007 Memorandum of Consultations (“2007

MOC”) that accompanied the “First Stage” Agreement recognize that there can be

differences between the Parties over the interpretation of provisions of the ATA that

apply to applications for operating authorizations.  They also establish that the

appropriate recourse for a Party that wishes to challenge another Party’s interpretation

of Article 4, Article 6 bis or Article 17 bis is to take its concerns to the Joint Committee.  

Thus, Article 18, paragraph 2, of the ATA says that a Party “may . . . request a meeting

of the Joint Committee to seek to resolve questions relating to the interpretation or

application of the Agreement,” and paragraph 33 of the 2007 MOC says that if a “Party

believes that its airlines are not receiving the economic authority to which they are

entitled under the Agreement, it can refer the matter to the Joint Committee.”6  

                                                 

5  Consistency of a grant of operating authorizations with Article 17 bis certainly is not a

citizenship issue.  Nor does it appear to be a fitness issue.  See 49 C.F.R. § 211.20, which

sets out the types of matters that pertain to foreign air carrier fitness: they have to do

with ensuring that an applicant has the managerial competence, financial wherewithal,

and regulatory compliance disposition to conduct the proposed operations.   

6   In our February 21 Joint Reply the Labor Parties suggested that the procedures of

Article 6 bis might apply to the denial of NAI’s applications.  For the reasons set forth in
13

Because of the nature of NAI’s application, the Department may decide that it

would benefit by having additional information to consider before it issues a show

cause order on the permit application.   If it so decides, DOT should issue document

production requests designed to obtain additional pertinent information, including the

production requests attached to the February 21, 2014 Joint Reply of the Labor Parties to

Comments on DOT’s January 30 Notice, and/or should hold an evidentiary hearing at

which representatives of NAS/NAI may be examined about the founding and structure

of the company, including the compensation and laws that apply to NLH’s air crew and

that will apply to NAI’s air crew.  

CONCLUSION

For the foregoing reasons, DOT should promptly deny NAI’s application for an

exemption.  The Department should also issue an order to show cause stating its intent

to deny NAI’s application for a permit as well.  If the Department believes that it would

benefit by having more information before it issues such a show cause order, it should

issue document production requests designed to obtain additional pertinent

information, including those attached to the February 21 Joint Rely of the Labor Parties

to Comments on DOT’s January 30 Notice, or hold an evidentiary hearing at which  

   

                                                 

these comments we believe that the Article 6 bis procedures do not apply and that DOT

has the unilateral right to deny both the application for an exemption and the

application for a foreign air carrier permit.
14

representatives of NAI may be examined about the founding and structure of the

company, including the compensation and laws that apply to NLH’s air crew and that

will apply to NAI’s air crew.

Respectfully submitted,

/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

/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

________________________________

Jonathan 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

Email:  Jonathan.Cohen@alpa.org

Email:  Russell.Bailey@alpa.org

Attorneys for Air Line Pilots Association

August 18, 2014

   
15

CERTIFICATE OF SERVICE

I certify that on this 18th day of August, 2014, the foregoing Joint Comments of

Air Line Pilots Association, Transportation Trades Department, AFL‐CIO, and the

European Cockpit Association and to Comments on DOT’s August 4 Notice were

served 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

EngleTS@state.gov

cristinasa@state.gov

Keith@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

emjahan@orange.fr

jh@eurocockpit.be

       

    Russell Bailey