BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

______________________________________________ In the matter of )

)

NORWEGIAN AIR INTERNATIONAL ) Docket OST

- 2013

- 0204

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) )

)

_____________________________________________ )

RESPONSE OF KLM ROYAL DUTCH AIRLINE S TO AUGUST 4 NOTICE

Communications with respect to this document should be sent to:

Mich iel Laumans

Director European Affairs

KLM Royal Dutch Airlines

149 Avenue Louise/17 th floor

1050 Brussels

Belgium

Email: michiel.laumans@klm.com

August 1 8 , 2014BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

______________________________________________ In the matter of )

)

NORWEGIAN AIR INTERNATIONAL ) Docket OST

- 2013

- 0204

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) )

)

_____________________________________________ )

RESPONSE OF KLM ROYAL DUTCH AIRLINES TO AUGUST 4 NOTICE

KLM files this response to the Department’s August 4, 2014 Notice that seeks the views

of interested parties on the Department’s summary of the July 14, 2014 meeting with DG

- MOVE

regarding the interpretation of Article 17 bis of the U.S.

- EU Open Skies Agreement. KLM’s

position is that (a) the position of the European Party to the Agreement has not been determined

yet; (b) Article 17bis should guide the Parties in their implementation of the Agreement; (c)

accordingly it should not bar the Department from denying Norwegian International Airlines

(NAI)’s application for U.S.

- EU scheduled authority under U.S. aviation law if it reaches the

conclusion the application is not in the public interest

.

O n February 21, 2014

, KLM filed comments opposing NAI’s application in this Docket

based on its view that NAI’s labor practices appeared questionable in light of the “high labor

standards” referred to in Article 17bis of the EU

- US Agreement as well as the U.S. statutoryKLM Response

August 1 8 , 2014

Page 3

policy goals under Sec. 40101(a) of Title 49. Use of Thai

- based cabin crews a nd European pilots

employed by Singapore

- based subsidiaries raise several essential issues in terms of labor

protections

. KLM regards s uch employment practices to be in coherent with the European

objectives of developing growth and jobs. Further

, KLM belie ves that EU Authorities should

thoroughly investigate the potential consequences of schemes of operations in which there is a

loose contractual link between crews and the operating airline.

The Department now seeks comments on DG

- MOVE’s view that Article 17bis cannot be

invoked by the Department or any other Party to the Open Skies Agreement alone to deny the

application of a carrier of the other Party for a license under Article 4.

First, KLM wishes to underscore that Department official s at this stage o nly heard the

views of DG

- MOVE officials . The Parties to the Agreement on the European side are the

Commission and its Member States. The Department , seeking the views of the European Union

on Article 17bis

, should find those in an official statement of t he EC and the Member States as

well.

Second ly

, KLM strongly believes that the provisions of Article 17bis should guide the

Parties in their implementation of the Agreement. In our view, Article 17bis formulate s legal

principles that ought to be taken into account in an Article 4(c) application; accordingly KLM

believes that th e implementation of the Agreement’s provisions including Article 4 should not

“undermine labor standards or the labor

- related rights and principles in the Parties’ respective

laws.” T he fact that Article 4 makes no reference to Article 17 bis is not compelling at all as

there is no language in Article 4 stating that Article 17 bis does not apply

.KLM Response

August 1 8 , 2014

Page 4

Thirdly, KLM read s Article 4(c) of the Agreement as imposing on t he Department an

obligati on to grant appropriate authorization to an applicant if “the airline is qualified to meet the

conditions prescribed under the laws and regulations normally applied...” Those “laws and

regulations” should include in our view the protection of the “high labor standards” secured by

Article 17bis as well as the policy objectives provided for by U.S. statutory law (49U.S.C. §§

40101(a)(5), 40101(a)(15) and (e)(1)).

Article 6 bis on reciprocal recognition of citizenship and fitness determinations does not

seem to prevent the Department from applying “public interest” considerations in deciding

whether to grant or deny NAI’s exemption application.

Thus, to the extent that the Department needs to act on NAI’s exemption application to

meet a statutory deadline (e.g. , 49 U.S.C. Sec. 41710), the Department is entitled to examine the

exemption application based on the applicable “public interest” standard that governs actions

under 49 U.S.C. Section 40109.

Consideration of the “public interest” including the fact tha t the position of the Europe an

Party has not been determined yet would require, in our view, that the Department denies NAI’s

exemption application at this stage . To the extent Article 6bis applies, the Department may then

notify the E uropean Party that it has questions whether the requirements of Article 4(c) have

been met by NAI’s application.

T he Department will remain in a position to continue to consider NAI’s application for

permanent authority. In that context

, the Department will be able to determine, on the record,KLM Response

August 1 8 , 2014

Page 5

after consultations with the EC and its Member States wh ich position to take o n NAI’s foreign

air carrier application.

Respectfully submitted,

Michiel Laumans

__________________________

Director European Affairs

KLM Royal Dutch Airlines

149 Avenue Louise/ 17 th floor

1050 Brussels

Belgium

August 1 8 , 2014