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 fore ign air carrier permit pursuant to ) 49 U.S.C. § 41301 (US

‐ EU Open Skies) )

______________________________________ )

ANSWER OF ALLIED PILOTS ASSOCIATION TO SUMMARY OF INFORMATI ON PROVIDED BY THE EUROPEAN DELE GATION REGARDING APPLICATION OF NORWEGIAN A IR INTERNATIONAL LIMITED

FOR AN EXEMPTION AND FOREIGN AIR CARRIER PERMIT

Having examined closely the Summary of Information provided by the European

Delegation concerning the application of Norwegian Air International Limited ( “ NAI ” ) for an

exemption and a foreign air carrier permit , t he Allied Pilots Association ( “ APA ” ) urges the

Department of Transportation (“DOT”) to engage in further fact

- finding to determine whether

the requested permit would , in fact, be “in the public interest ” as r equired under 49 U.S.C. §

41302.

The information contained in the Summary of Information

– which consists solel y of

unsupported, hearsay statements

– is not sufficient to enable DOT to make an informed

determination about whether NAI’s proposed service offerings fall wi thin the letter or the spirit

of the U. S.

‐ European /Norway/Iceland Air Transport Agreement (the “US

- EU ATA”)

. Moreover,

what little information the Summary of Information does contain suggests that NAI’s proposed

offerings neither encourage “fair wages and working conditions,” 49 U.S.C. § 40101(a) (5), nor2

“strengthen the competitive position of [U.S.] air carriers to at least insure equal ity with foreign

air carriers.” 49 U.S.C. § 40101(a)(15) and (e)(1).

APA understands that multiple parties are filing answers to the Summary of Information

provi ded by the European Delegation. Thus, to avoid redundancy, APA will not here engage in a

detailed legal analysis of the arguments advanc ed by the Eu ropean Delegation.

Rather, APA has compiled a list of questions raised by parties in previous filings that

were not answered or not adequately addressed by the Summary of Information

. The APA has

also identified a number of questions newly raised by the European Delegation’s statement.

These questions can be broadly grouped into five categories: (A) questions r elated to NAI’s

corporate relationship to Norwegian Air Shuttle ( “ NAS ” ) ; (B) questions related to NAI’s

corporate and operational relationship to Norwegian Long Haul AS (“NLH”) ; (C) questions

related to the NAI’s intended labor and staffing model (includin g NAI’s position regarding the

applicability of various lab or protections and social laws); (D) questions related to the Irish and

Norwegian government positions on the labor laws and terms and conditions of employment that

govern NAI’ s flight crew; and (E ) questions related to NAI’s purported rationale for registering

aircraft in Ireland and establishing NAI as an Irish airline.

A complete list of outstanding questions identified by APA is set forth below, with

accompanying context and commentary. These q uestions should be answered by NAI in full

before DOT makes any determination on NAI’s exemption and permit applications.

A. NAI’s Relationship to NAS

The Summary of Information indicates that NAI is an NAS subsidiary, but does not

provide additional deta il as to the corporate relationship. See Summary of Information at 1.3

This leaves unanswered the following questions:

1. What is the corporate relationship between NAI and NAS ? How is that corporate relationship structured?

2. Does NAS or an entity that it controls hold any stock in NAI? If so, how much of each class of NAI stock does NAS own and what percentage of each class does NAS own? How much NAI stock is owned by an entity that NAS controls and what percentage of each class of NAI stock is owned by an e n tity that NAS controls?

3. What is the relationship between NAS and any other stockholder of NAI?

4. Does any current or past employee, officer

, or director of NAS or its corporate affiliates sit on the board of directors of NAI? If so, who?

5. Does any c urrent or past employee, officer, or director of NAS or its corporate affiliates hold a management position at NAI? If so, who?

B. NAI’s Relationship to NLH

The Summary of Information indicates that NLH is also an NAS subsidiary, but does not

provide addit ional detail as to the corporate relationship with NAS or NAI. See Summary of

Information at 1. The exemption and foreign air carrier permit applications have been submitted

in the name of NAI. However, the European Delegation’s statement discusses NHL’s current

Norwegian Civil Authority Air (“NCAA”) Operator’s Certification (“AOC”) as well as current

NCAA operating licenses with respect to two Irish

- registered aircraft that are set to expire in

February 2014 and April 2014, respectively. Id

. The European D elegation also states tha t, if the

Irish regulatory p rocess for NAI is still pending after February 2014, NHL would request an

extension of its Norwegian

- issued licenses. See id

. In addition, the Summary of Information

describes the “NLH/NAI business mod el” as a unitary model that utilizing operating bases in the

United States and Asia to serve several European Destinations

. Id

. at 1

- 2.

This leaves unanswered the following questions:4

6. What is the corporate relationship between NAI and NHL? How is that c orporate relationship structured?

7. Does NLH, any entity that NLH controls, or any NLH stockholder hold any stock in NAI? If so, how much of each class of NAI stock do these NLH affiliates own and what percentage of each class do these N LH affiliates own ?

8. What is the relationship between N LH and any other stockholder of NAI?

9. Does any current or past employee, officer, or director of N LH or its corporate affiliates sit on the board of directors of NAI? If so, who?

10. Does any current or past employee, of ficer, or director of N LH or its corporate affiliates hold a management position at NAI? If so, who?

11. Within the unitary “ NAI/NLH ” business model, for what flying is N LH responsible? For what flying is NAI responsible?

12. Within the unitary “NAI/NHL” busi ness model, what operating bases will NLH use? What operating bases will NAI use?

C. Labor and Staffing

The Summary of Information indicates that

, given the NLH/NAI business model of

utilizing US and Asian operating bases, “basing crews outside of Europe makes more sense

economically .” See Summary of Information at 2. The European Delegation also stated that the

carriers intend to hire and domicile crews at operating bases outside Europe in order to address

“the related and complex staffing issues,” in par ticular domiciling crews “in Thailand generally

for Bangkok

- Europe fights, in the United States for U.S.

- Europe flights, etc.” Id

. The Summary

of Information indicates that “the local labor laws of those countries would apply.” Id

. The

statement also ass erts that “NAI intends to hire U.S. pilots in the future and would prefer to have

crew bases in the U nited States for its U.S. operations.” Id

. With respect to the present, the5

European Delegation indicated that NAI “is currently training cabin crew member s that will be

based in the United States, under U.S. law,” and currently utilizing long

- haul pilots “employed

by Global Crew Asia (Singapore)” and cabin crew members “employed by Adecco (Thailand). ”

Id

.

This leaves unanswered the following questions:

13. Who is the NLH air crew employed by? Who will the NAI air crew be employed by?

a. The D elegation indicated that N L H currently utilizing long

- haul pilots “employed by Global Crew Asia (Singapore)” and cabin crew members “employed by Adecco (Thailand).” This, h owever, is hearsay evidence and NAS has produced no contracts or documents so indicating.

b. The Delegation’s statement as to current employment practices suggests that the hiring agencies that provide employ NLH flight crews will likewise employ air

crews at NAI. However, the Delegation’s statement does not speak directly to this point.

c. The statement that NAI “intends to hire U.S. pilots in the future” does not indicate which entity would employ those pilots.

14. What are the terms and conditions that appl y to the employment of non

- management air crew (pilots and flight attendants) who work for NLH and NAI?

a. The Delegation indicated that N LH is currently utilizing long

- haul pilots “employed by Global Crew Asia (Singapore)” and cabin crew members “employed by Adecco (Thailand).” NAS has produced no contracts or documents indicating the terms and conditions of such employment.

b. The Delegation further provided average gross salary payment figures for Norwegian, Spanish, Thailand, and U.S. pilot and crew posi tions. The Summary
of Information did not, however

, specify the source of this salary information, provide any original documents to support these figures, or indicate that NAI has
committed to maintain such rates.

15. Where will NLH and NAI’s non

- management air crews be domiciled?6 a. The EU Delegation’s statement indicates an aspiration to domicile crew bases for
U.S.

- E.U. routes in the U.S. in the future . However, the Summary of Information offers no guidance about when such U.S. domiciles might be establish ed and, indeed, makes no firm commitment to domicile crews in the U.S. at all

. Moreover, the statements as to NAI/N L H ’s business model indicate that the
C ompany has ruled out domiciling crews in Europe.

b. This suggests that

– at least for some indefinite period of time

– NAI plans to domicile its pilots (and perhaps even crews) in Asia , even with respect to U.S.

- E.U. routes. It is unclear how such an arrangement would “make more sense economically

, ” unless NAI anticipates a large differential in labor co sts.

16. What country’s or countries’ labor laws apply to the employment contract of NLH and
NAI’s non

- management air crew?

a. The European Delegation indicated that NLH/NAI intends to apply the “local
labor laws” of the countries in which its crews are domic iled. A s indicated above, it appears that NAI will continue to domicile crews for U

. S

. - E

. U

. routes in Asia. In addition, even if some US domiciles are used at some undetermined time in the
future , it appears that NAI will continue to utilize Asian employe r intermediaries. It is unclear which labor laws would apply in that circumstance.

b. The European Delegation also indicated that NAS “has no tradition of discouraging unionization.” This unsupported statement is, at best, nebulous. It is
unclear what it w ould mean to have a “tradition” of discouraging unionization, and the Summary of Information offers no reference point or basis for comparison. Moreover, this s tatement offers no commitment of future compliance with the labor protections of any particular country.

17. Is NLH’s non

- management crew able to select a bargaining representative to negotiate terms and conditions of employment with NLH? If so what, what are the laws that govern the selection of a bargaining representative for the NLH air crew and the negotiation of their terms and conditions of employment? What will be the policy for
NAI?

a. The Delegation indicates that “company employees are organized in labor unions,” but does not specify whether this statem ent refers to NAS employees,

NLH employees or both. In addition, the Delegation did not specify which labor laws apply so such collective bargaining arrang e ments.7 b. The European Delegation indicated that NLH/NAI intends to apply the “local
labor laws” of the countries in which its crews are domici led. A s indicated above, it appears that NAI will continue domicile crews for U.S.

- E.U. routes in Asia. In addition, even if some U

. S

. domiciles are used at some undetermined time in the future, it appears that NAI will continue to utilize Asian employer intermediaries. It is unclear which labor laws would apply in that circumstance.

c. The European Delegation also indicated that NAS “has no tradition of discouraging unionization.” As stated above, this statement is unsupported and
nebulous at best given t he absence of any benchmarks or basis for comparison. Moreover, again, it offers no commitment of future compliance with the labor protections of any particular country.

18. Do the terms of employment for NLH’s flight crew differ from those of NAS’s flight

cr ew in Norway? Will the terms of employment for NAI’s flight crew differ from those of NAS’s flight crew in Norway? If so, how?

a. The European Delegation provided average gross salary payment figures for Norwegian, Spanish, Thailand, and U.S. pilot and cre w positions. The tabl es provided did not specify the employing entities for these positions

. Nor did the Summary of Information specify the source of this salary information, give any
detail as to the range of salaries for the cited countries, provid e any documents to support these figures, or indicate that NAI has committed to maintain the cited

rates going forward

.

b. Summary of Information provided no information as to terms and conditions of employment other than the above

- cited average gross salary fig ure.

D. Positions of Norwegian and Irish Governments

T he European Delegation made clear its support for NAI’ s exemption and permit

application s , and appeared to implicitly endorse Norwegian’s contention that NAI and NHL

crews would be subject to the loca l labor laws of the countr ies in which they were domiciled.

See Summary of Information at 2

- 3 . It did not, however

, discuss the position of the g overnments

of Norway and Ireland with respect to the terms and conditions of NLH and NAI’s flight crew,8

or th ose governments’ positions with respect to the labor laws that govern the operations of NLH

and NAI.

This leaves unanswered the following questions:

19. What is the position of the government of Norway with respect to the terms and
conditions of NLH and NAI ’s flight crew?

20. What is the position of the government of Ireland with respect to the terms and conditions of NLH and NAI’s flight crew?

21. What is the position of the government of Norway with respect to the labor laws that govern the operations of NLH and NAI?

22. What is the position of the government of Ireland with respect to the labor laws that govern the operations of NLH and NAI?

E. Purported Explanation for Pursuing Non

- Norwegian AOC

The Summary of Information indicates that NAI’s goal in registering ai rcraft in Ireland

and establishing NAI as an Irish airline was not to avoid Norwegian social laws but, rather, to

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

access to additional financing under OECD ru les, and access to insurance and financing rebates

because Ireland is a Cape Town Convention signatory.” Summary of Information at 1. In

addition , the Summary cites Ireland’s “considerable aviation cluster ” as a reason for licensing

NAI as an Irish Carrie r. Id

.
This response newly raises the following questions:

23. Wha t additional traffic rights would be available to NAI as an E.U. carrier that are not
available to it as a Norwegian carrier? Given that NAI is not planning operations out of Ireland, h ow doe s NAI intend to make use of these traffic rights? Does NAI have documentation indicating that it will take advantage of these E.U.

- only traffic rights?24. What additional financing is available to carriers in countries that are signatories to the
Convention on the Organisation for Economic Co-operation and Development? Does

NAI have concrete plans to take advantage ofthe OECD financing options? Is there

documentation supporting such intent?

25. What insurance and financing rebates would be available to an Irish carrier under the Cape Town Convention? Does NAI have concrete plans to take advantage of the Cape

Town Convention financing or insurance provisions? Is there documentation supporting

such intent?

26. What is it specifically about Ireland's "considerable aviation cluster" that is preferable to Norway's?

CONCLUSION

If DOT does not immediately reject NAI' s application for an exemption and foreign air

carrier permit, DOT should

- at minimum

- require NAI to answer the above questions in full.

Unless and until NAI provides the information described above, DOT will not be able to make

an informed determination about whether the foreign air transportation NAI seeks to provide

under the requested permit would be "in the public interest." 49 U.S.C. § 41302.

February 14,2014

9

# :~it:d'

David P. Dean
JAMES & HOFFMAN, P.C.
1130 Connecticut Avenue, N.W. Suite 950 Washington, D.C. 20036-3975 (telephone) 202-496-0500 (facsimile) 202-496-0555 ejames@jamhoff.com dpdean@jamhoff.com

Attorneys for the Allied Pilots Association10 CERTIFICATE OF SERVICE

I certify tha t I have, on this 14 th day of February, 2014 , served the foregoing Answer by

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

J osh Romanow Peter Nelson Counsel for Norwegian Air International Limited romanow@pillsburylaw.com peter.nelson@pillsburylaw.com

Steve Morrissey Thomas Bolling United Airlines steve.morrissey@united.com thomas.bolling@united.com

Dan Weiss Hershel Kamen United Airlines dan.weiss@united.com hershel.kamen@united.com

Sascha Van der Bellen Delta Airlines sascha.vanderbellen@delta.com

Howard Kass U.S. Airways howard.kass@usairways.com

Robert Wirick Francis Heil American Airlines, Inc. robert.wirick@aa.com francis.heil@aa.com

Robert Land Senior Vice President of Government Affairs and Association General Counsel robert.land@jetblue.com Russell E. Pommer Associate General Counsel & Sr. Director Regulatory Affairs Atlas Air Inc. rpommer@atlasair.com

Celin e Canu Philip Von Schoppenthau European Cockpit Association cc@eurocockpit.be pvs@eurocockpit.be

Malcom L. Benge Counsel for North American/World Airways Zuckert Scoutt & Rasenberger, L.L.P. mlbenge@zsrlaw.com

John M. Allen Michael Whitaker Jesse Elliot Douglas Schwab Nicholas Tsokris Federal Aviation Administration john.allen@faa.gov michael.whitaker@faa.gov jesse.elliot@faa.gov douglas.schwab@faa.gov nicholas.tsokris@faa.gov john.chen@faa.gov

Anita Mosner Jennifer Nowak Counsel for UPS Holland & Knight anita.mosner@hklaw.com jennifer.nowak@hklaw.com11

Nancy S. Sparks Bailey Leopard Federal Express Corporation nssparks@fedex.com gbleopard@fedex.com

Russell Bailey Jonathan Cohen Air Line Pilots Association, International russell.bailey@alpa.org jonatha n.cohen@alpa.org

Edward Wytkind President, Transportation Trades Department, AFL

- CIO edw@ ttd.org

Krishna Urs Kristin Westphal Department of State urskr@state.gov westphalkl@state.gov cristinasa@state.gov

Paul Gretch Robert Finamore Brian Hedberg
Reese D avidson Esta Rosenberg Brett Kruger U.S. Department of Transportation

p aul.gretch@dot.gov robert.finamore@dot.gov brian.hedberg@dot.gov reese.davidson@dot.gov esta.rosenberg@dot.gov brett.kruger@dot.gov

David Berg James Casey Keith Glatz Cecilia Bethke A irlines for America dberg@airlines.org jcasey@airlines.org kglatz@airlines.org ebethke@airlines.org

Vegard Einan Vice President Parat vegard.einan@parat.com

Chris Lytle Executive Director, Port of Oakland clytle@portoakland.com

Kent G. George Director of Aviation Fort Lauderdale

- Hollywood International Airport kgeorge@broward.org

Mark Richardson President, Southwest Airline Pilots’ Association mrichardson@swapa.org

Eugene Alford Air Transport Services eugene.alford@trade.gov

Matthew Baldwin Director, Aviation and International Transport Affairs European Commission matthew.baldwin@ec.eurpoa.eu

Felix Leinemann First Secretary, Transport felix.leinemann@eeas.europa.eu

David Batchelor Representative, Single European Sky ATM Research Joint Undertaking dav id.batchelor@sesarju.eu

Ottar Ostnes12

Director General, Ministry of Transport and Communications ottar.ostnes@sd.dep.no

Stephen Shur President, The Travel Technology Association sshur@traveltech.org John Hanlon Secretary General, Eruopean Low Fa res Airline Association john.hanlon@ELFAA.com

Leo Varadkar Minister for Transport, Tourism and Sport minister@dttas.ie

Leo Schefer President, Washington Airports Task Force leo@washingtonairports.com

Buddy Dyer Mayor, City of Orlando, Florida buddy.dyer @cityoforlando.net

Teresa Jacobs Mayor, Orange County, Florida mayor@ocfl.net

Phillip Brown Frank Kruppenbacher Greater Orlando Aviation Authority pbrown@goaa.org fkruppenbacher@goaa.org

George Aguel President and CEO, Visit Orlando george.aguel@visitor lando.com

Concerned Citizen for a Fair America ashburnxxx@gmail.com

info@airlineinfo.com