Feb. 13, 2016 SIGN IN | REGISTER

U.S. Carriers Wary of Norwegian Airline's Cut-Rate Wages

While foreign flag carriers have long served American destinations, U.S.-based carriers contend today’s competitors are more cutthroat than ever, taking advantage of legal technicalities and sometimes the deep-pocketed assistance of foreign governments to subsidize their long-term growth plans.

Two carriers in the United Arab Emirates, Etihad and Emirates, have been at the center of recent protest by groups including Airlines for America and the pilots association. They are worried a proposal to open a Customs and Border Patrol preclearance facility in Abu Dhabi would unfairly advantage Etihad, since it’s the only carrier that serves the United States directly from the city.

While Norwegian doesn’t enjoy the government subsidies that help some Middle Eastern carriers, the pilot union worries that its move to circumvent Norway’s labor regulations by registering aircraft in Ireland will have an effect on aviation similar to the impact that “flags of convenience” have had on maritime shipping. By registering ships in countries such as Panama where labor costs and taxes are significantly lower, cruise operators and cargo haulers alike have been able to cut their costs, leaving the United States with one of the smallest flag fleets among developed seafaring nations.

Norwegian has retorted that it pays its Asia-based crews wages similar to those offered by other airlines — including Northern Europe competitor Finnair — and is planning to hire “hundreds” of American workers as it expands in the United States.

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