Europe launches arbitration to solve Norwegian impasse

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Europe launches arbitration to solve Norwegian impasse

Unread post by bimjim » Thu Jul 28, 2016 ... an-impasse

Europe launches arbitration to solve Norwegian impasse
Alan Dron
Jul 27, 2016

The European Union (EU) has given formal notice to the US Department of Transportation (DOT) that it will begin arbitration over the question of Norwegian Air International’s (NAI) access to the US market.

However, this move does not promise a swift resolution to the problem.

NAI, which wants to launch transatlantic low-cost services from Ireland, applied for a foreign air carrier permit from DOT in December 2013. The move sparked fierce opposition from several airlines on both sides of the Atlantic, together with US unions, which said NAI was attempting to institute a “flag of convenience” arrangement to sidestep Norway’s strict labor legislation. NAI has consistently denied this.

By setting up NAI in Ireland, Norwegian is able to take advantage of European Union–US Open Skies agreements. Norway is not a member of the EU.

DOT granted tentative permission to NAI’s proposals in April 2016, but still has not formally confirmed it; NAI cannot launch services without this final approval.

“We notified the US authorities yesterday that we will be launching arbitration,” a European Commission Transport Directorate spokesman said July 27. Noting DOT’s tentative approval in April, he added: “By now, it should have confirmed it.”

He said the arbitration process would be launched in September and was likely to take eight or nine months. Despite this move, the EU was continuing to urge the US to comply with the Open Skies agreement before the arbitration process ran its course.

The EU, he added, was also inviting DOT to approve a foreign air carrier permit for another UK-based Norwegian subsidiary that wishes to start transatlantic flights, although the Commission is not launching arbitration on this application at this point.

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