### BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

In the matter of NORWEGIAN AIRINTERNATIONAL LIMITED for an exemption under 49 U.S.C. 

### § 40109 and a foreign air carrierpermitpursuant to 49 U.S.C. 

### § 41301 (US-EU Open Skies) ) ) ) ) ) ) ) ) ) 

### Docket OST-2013-0204



## ----------------------------------- ) ANSWER OF SCANDINAVIAN AIRLINES SYSTEM (SAS)

Communications with respect to this document should be sent to: Hans Ollongren Head ofPublic and Regulatory Affairs SCANDINAVIAN AIRLINES SYSTEM STODX SE-195 87 Stockholm, Sweden

June 10,2015 Michael F. Goldman SILVERBERG GOLDMAN, L.L.P. 1101 301h St., NW, Suite 300 Washington, DC 20007 Tel: (202) 944-3305 Email: mgoldman(cV,sgbdc.com Counsel for SCANDINAVIAN AIRLINES SYSTEMBEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

In the matter of NORWEGIAN AIRINTERNATIONAL 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) ) ) ) ) ) ) ) ) )


# _________________________________ ) Docket OST-2013-0204

ANSWER OF SCANDINAVIAN AIRLINES SYSTEM (SAS)

Scandinavian Airlines System ("SAS") submits this answer in oppositionto Norwegian Air International's ("NAI'') motion for expedited treatment ofits foreign air carrier permit application filed with the Department in December 2013. SAS's position opposing the grant ofthe NAI application is unchanged bythis latest NAI filing. The NAI application should be denied because it does not meet the "high labor standards" requiiement ofAtiicle 17 bis ofthe U.S.-EU Open Skies Agreement. SAS's position has been set out in full in its prior filings in the NAI Docket, specifically in the SAS/LufthansaJoint Reply filed February 21, 2014 and the SAS Answer dated August 18, 2014. In short, NAI's application continues to undermine the "labor standards orthe labor-related rights and principles" ofNorway and the United States, contrary to Article 17 bis ofthe Open Skies Agreement.SAS Answer June 10,2015 Page 2 Let's be clear: this application is not about the ability ofNAI'sparent, Norwegian, to
serve the United States. Itdoes so successfully today usingthe full traffic rights accorded its Norwegian-licensed affiliates, Norwegian Air Shuttle ASA (NAS) and Norwegian Long Haul AS (NLH), underthe U.S-EU Open Skies Agreement. NAS offer numerous flights today on U.S.-Scandinavian and U.S.-U.K. routes, and has opento it all markets between the U.S. andthe EU/Norway/Iceland. Rather, NAI's application is aboutNorwegian's rationale for establishing a "flag ofconvenience" carrier, Ireland-basedNAI, inclear violation ofthe labor protections accorded airline employees by Article 17 bis. Itviolates these guarantees by employing pilots and cabin crew either based in Thailand or composed ofThai nationals, that are subject to nonUS/EU and inferior wage rates and employment conditions; and byusing an Irish license to avoidNorwegian labor laws and social insurance obligations. See SAS/Lufthansa Joint Reply at 2-3. NAI's asserted reasons why it needs to abandonNorway and establish itselfin Ireland have been shownto be false and make-weights. The alleged need for traffic rights to non-U.S. destinations, and access to better financing and insurance under OECD rules and the Cape Town Convention, were shownto be untrue. See SAS!LtifihansaJoint Reply at 3-4.
NAI's supposed new commitmentto use U.S. and European crews on its transatlantic routes does not change SAS'sposition one bit.. 1 This is becauseNAI's so-called commitment raises more questions than answers. For example--

1The commitment is "to use only European and U.S. pilots and crews on Norwegian International transatlantic flights (except ifcompelled by extraordinary and unforeseen operational reasons)." NAI Motion at 2 and Exhibit 1.SAS Answer June 10, 2015 Page 3
• Is NAI proposing thatthis commitment should be a binding conditionto any DOT permit grantedNAI so that the condition is more thanjust "window dressing"? Is NAI prepared to file monthly reports identifying its pilots and cabin crewby nationality so compliance with the condition can be verified?
• What is the meaning ofthe exception for "extraordinary and unforeseen operational reasons"? How is this to be defined and enforced?
• As for the second "commitment" that appears only in the Kjos letter (Exhibit 1) to provide for the transferto employment in a company in the Norwegian Group, does this mean transfer to employment with the airlines NAS orNAI? Does the 24 to 36 months' waiting period begin withthe date NAS and/orNLH began flying to the U.S.
or only ifand whenNAI is licensed by the Department? Only when all these issues raised by NAI's new "commitments" are addressed either through a further round ofsubstantive pleadings or an evidentiary hearing canthe Department determine whetherNAI's labor practices can be found to comply withthe protections accorded by Article 17 bis or whetherthese Open Skies Agreement obligations remain an insurmountable obstacle to the granting by the Depmiment ofNAI's application for a foreign air canierpermit.SAS Answer June 10,2015 Page 4

June 10,2015 Respectfully submitted,

Michael F. Goldman Silverberg Goldman, L.L.P. 1101 30t11 St., NW, Suite 300 Washington, DC 20007 Telephone: (202) 944-3305 Email: mgoldman@sgbdc.com Counsel for SCANDINAVIAN AIRLINES SYSTEMCERTIFICATE OF SERVICE I hereby certify that I have onthis day served the forgoing Answer ofScandinavian Airlines System (SAS) by e-mail onthe following persons: romanow@.pillsburylaw.com peter.nelson@.pillsburylaw.com russell.bailey@alpa.com steve.morrissey(iounited.com dan.weiss@united.com sascha.vanderbellen@delta.com howard.kass@.usairways.com robert.wirick@aa.com francis.heil@aa.com robert.land((V,jetblue.com rpommer(iV,atlasair.com anita.mosner@.hklaw.com

**je1mifer.nowak(q:~hklaw.com** mlbenge@zsrlaw.com ejames(W,jamhoff.com cIytle@potialakland.com leo({i)washingtonports.com paul.gretchrq)dot.gov robert.finamore@dot.gov jesse.elliot@faa.gov douglas.schwab(q),faa.gov nicholas.tsokris@faa.gov john.allen@faa.gov nssparks{{i)fedex.com

Date: June 

### 10,2015 gbleopard@fedex.com robert.finamore(a),dot.gov esta.rosenberg@dot.gov brett.kruger(cV.dot.gov urskr@state.gov info@airlineinfo.com pvs((i),eurocockpit.be cc@eurocockpit.be brian.hedberg@,dot.gov englets((i),state.gov cristinasa@)state.gov eugene alford@ita.doc.gov info@airlineinfo.com dberg@airlines.com jcasey(W,airlines.com kglatz(a),airlines.org cvevvthke(W,airlines.org mrichardson@swapa.org edw@ttd.org sshur(ZiJ.traveltech.org rdow@,ustravel.org kgeorge@,broward.org keith@washingtonairports.com



# J;ntdaJ!~fdw,~ Michael F. Goldman