The chairman of the House Transportation and Infrastructure Committee finds himself fighting a battle once again to keep a Norwegian-based airline out of U.S. skies.
Rep. Peter A. DeFazio, D-Ore., spent years fighting to keep Norwegian Air International, a low-cost, long-haul carrier that was a subsidiary of the Oslo-based Norwegian Air Shuttle, out of the U.S. market because of his concerns over its business model, but the airline nonetheless received a permit to fly in the United States in 2016. Those flights halted last year, when the airline’s long-haul division, hard hit by the COVID-19 pandemic, declared bankruptcy.
Now a new airline with connections to Norwegian Airlines, Norse Atlantic Airways, is trying to enter the U.S. market, meaning DeFazio finds himself trying again to block the permit.
DeFazio says he is so outraged about the new airline’s attempt to reenter the U.S. market that he spent part of time during Transportation Secretary Pete Buttigieg’s first appearance before his committee urging Buttigieg not to let the airline back in U.S. skies.
“Norwegian is bankrupt, and its U.S. services have ceased, but its founder is forming a new carrier that will likely seek a permit — Norse Atlantic — and it is imperative that you correct the error of 2016 and deny this airline’s application,” he told Buttigieg. He and Rep. Rick Larsen, D-Wash., followed up by sending Buttigieg a letter urging him to deny the airline’s permit.
DeFazio and Larsen say they are specifically concerned that Norse Atlantic will emulate Norwegian’s use of a business practice, commonly used in the cruise industry, called “flag of convenience,” in which a merchant ship’s owner registers the vessel in a country other than that of the ship’s owner.
The cruise industry has been criticized for using the practice to elude stronger labor laws or other requirements. DeFazio said that the practice allowed the airline to cut labor costs by registering in countries that don’t have stringent regulations.
Though Norwegian Air Shuttle was Oslo-based, Norwegian Air International was registered in Ireland, where corporate tax rates are lower. It originally used crews from a staffing agency, OSM Aviation, to keep wages down, according to a 2014 CQ report, but later brought the crews in-house.
DeFazio and Larsen say they’re worried the new airline has connections to Norwegian. Norwegian’s founder and former CEO, Bjoern Kjos, holds a 15 percent stake in Norse Atlantic. The majority owner of Norse Atlantic is Bjoern Tore Larsen, a co-founder of OSM Aviation.
In a statement, Norse Atlantic Airways said it is based in Norway, has no presence in Ireland and intends to have full-time employees.
“Norse is a new airline, headquartered in Norway, with mainly Norwegian shareholders and about to be listed on the Oslo stock exchange,” the statement read. “Norse intends to obtain an operating license in Norway.”
'Stick to the facts'
The airline said while it plans to offer long-haul flights at an affordable fare, it will operate according to the applicable regulatory framework and employ “many Americans” on cabin and flight crews and as administrative staff. The staff will be full-time employees, they wrote, and the airline said it will “fully respect” their right to unionize.
“We encourage everyone to stick to the facts and not listen to incorrect claims made by parties who don’t know our company or have made any effort to reach out to us,” they wrote.
In their letter, DeFazio and Larsen urged Buttigieg to deny any future application from Norse for a foreign air carrier permit.
“If Norse Atlantic Airways’ business model is predicated on the same flag of convenience concept that we saw in the case of Norwegian and its various alter egos, the public interest demands that the Department deny the carrier’s application for a foreign air carrier permit if it is submitted to the Department,” they wrote March 30.
Labor unions such as the Association of Flight Attendants-CWA, which fought Norwegian Airlines’ efforts to enter the United States, vowed to fight the same battle again with Norse.
“Norse Air, like Norwegian before, should not be permitted to use corporate shell games to avoid responsibilities to its employees,” said Sara Nelson, international president of the Association of Flight Attendants-CWA, which represented the U.S.-based Norwegian Air crew after a lengthy battle between the airline and the U.S.-based cabin crew. "We will ensure these workers' rights are protected."
Citing the 2007 Open Skies agreement, the Obama administration approved Norwegian’s request to fly in the United States in 2016 despite opposition from Democrats and labor groups. Among those who wrote the administration to urge them to reject the application was then-House Minority Leader Nancy Pelosi, D-Calif.
On its website, Norse Atlantic Airlines said it hopes to fly to destinations including New York, Los Angeles, Miami, London, Paris and Oslo. It also says it hopes to begin selling tickets in fall 2021 with the first flight expected to take off in December 2021. And they’ll use Boeing’s 787 Dreamliner aircraft.
“Norse Atlantic Airways believes that there is a need for a new and innovative airline serving the low-cost intercontinental market as the world re-opens. The new airline will offer comfortable flights with fuel-efficient and more environmentally friendly Boeing 787 Dreamliners,” Norse Atlantic’s website read.