Legislation seeking to protect aviation jobs in the United States from unfair competition and limit the Department of Transportation’s (DOT) ability to issue foreign air carrier permits for U.S. operations was introduced this week in the House of Representatives.
The measure would specifically prohibit DOT from issuing foreign air carrier permits before thoroughly determining that the entity is not exploiting a “flag of convenience,” which means that the foreign air carrier is establishing itself in a country other than its home country of its majority owners to avoid regulations.
The bill, the Flags of Convenience Don’t Fly Here Act, was introduced by Ranking Member of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), Chairman of the Subcommittee on Aviation Frank LoBiondo (R-NJ), Ranking Member of the House Subcommittee on Aviation Rick Larsen (D-WA), and Rep. Drew Ferguson (R-GA).
On Dec. 2, 2016, DOT issued a foreign air carrier permit to Norwegian Air International (NAI), which had already established itself in Ireland to avoid strong labor protections in Norway.
“When the Department of Transportation granted Norwegian Air International’s permit, it guaranteed a race to the bottom in our transatlantic aviation market,” DeFazio said. “Now, any airline can set up under a flag of convenience to exploit weak labor laws in other countries, save money, and undercut competition. Our bipartisan bill protects American jobs from predatory and unfair competition, and it protects the American flying public from deceptive flags of convenience.”
The senators argue that the DOT’s decision will encourage other opportunistic airlines to continue to exploit flag of convenience operations, threatening U.S. carriers’ ability to compete in international markets.
“The Department of Transportation’s decision to grant Norwegian Air International a foreign air carrier permit was in direct contravention of the US–EU Open Skies Agreement to ensure airlines doing business in the US have strong labor standards,” Larsen said. “This bill would prevent DOT from issuing foreign carrier permits when airlines try to side step regulations and labor laws by setting up flags of convenience schemes.”