Dear Mr. President-elect:
On December 2, 2016, the Department of Transportation (DOT) made a grievously wrong decision to grant Norwegian Air International a foreign air carrier permit for U.S.-Europe air services. Given your commitment to protecting American jobs and our national security, we strongly urge you, on Day One of your presidency, to revoke or suspend the permit until Norwegian changes its business model to a model that does not rely on a flag of convenience and threaten America's international aviation industry and our national security.
Norwegian is "Norwegian" in name only: Its crews work under short-term contracts, many governed under Singapore law; some crewmembers are based in Bangkok; and the company is organized and regulated in Ireland. It is, for all intents and purposes, a virtual airline. Norwegian is the first airline in the transatlantic market to fly under a flag of convenience, but the Department's recent decision guarantees Norwegian will not be the last.
If the DOT's decision stands, other airlines are likely to follow suit and organize subsidiaries in foreign countries with lax labor laws, tax loopholes, or weak safety and security oversight. Global civil aviation will devolve into a system that relies on flags of convenience. This race to the bottom will threaten the viability of U.S. airlines and their fleets of widebody aircraft that comprise the Civil Reserve Air Fleet (CRAF). Under the CRAF program, airlines volunteer parts of their fleets for military use during national emergencies and in times of war. More than 130 widebody aircraft in the United States' three major long-haul carriers' fleets were available for mobilization by the Department of Defense under the CRAF program as of January 2016. However, if U.S. carriers find themselves unable to compete with other airlines that copy Norwegian's flag-of-convenience business model, U.S. airlines will downsize their widebody fleets, and our ability to move troops and materiel will suffer substantially. National security, as well as American jobs, is on the line.
The U.S.-E.U.-Iceland-Norway Open Skies agreement opened the transatlantic aviation market. Norwegian and every airline in the market benefit from the right under the agreement to fly from anywhere in the United States to anywhere in Europe. In creating this lucrative right, however, the agreement included protections to ensure fairness in the transatlantic aviation market.
The DOT ignored those protections, as well as well-established law prohibiting a decision inconsistent with those protections, in granting Norwegian's permit, and our country will pay a price for that failure of responsibility. We will pay that price as we watch a race to the bottom among airlines that are forced to compete with Norwegian. Moreover, while Norwegian chose the safe harbor of a country whose labor laws permit forum-shopping for the cheapest labor, the next airline to fly under a flag of convenience may choose the safe harbor of an opportunistic country with weak safety and security regulations, with serious consequences for safety and national security.
We strongly urge you to correct the Department's mistake. We urge you, on Day One of your presidency, to start the process necessary to revoke or suspend Norwegian's permit.
Thank you for your consideration of our views.