Imagine an industry that today employs nearly 700,000 people, that supports over 10 million jobs across the United States. Now, imagine the government putting that and an annual 5 percent of gross national product at risk while ceding its oversight role over the safety and security of 900 million air travelers per year.
That’s the precipice upon which America’s airline industry stands today. Thanks to the last-minute approval of Norwegian Air International’s foreign carrier permit by the Obama administration, just weeks before he left office, the American airline industry now faces a threat very similar to the one responsible for destroying the once-mighty U.S. maritime shipping industry.
NAI, which begins flying new routes between the U.S. and Europe this month, operates internationally under a “flag-of-convenience” scheme – a business model that allows it to skirt international labor standards, outsource cheap labor from low-wage countries, and take advantage of weak safety and security oversight. To avoid the regulations that would limit such action, NAI established its operations in Ireland to take advantage of that country’s lax labor and other regulations.
By approving NAI’s application, the Obama administration kicked off a global race to the bottom for the airline industry, and the hundreds of thousands of hard-working men and women who keep our nation’s airlines flying will pay the steepest price.
The good news is that a group of bipartisan members of Congress recently took a stand against the grave threat of flag-of-convenience schemes in the airline industry by introducing legislation (H.R. 2150, the Flags of Convenience Don’t Fly Here Act) that would prohibit the Department of Transportation (DOT) from issuing a permit to a foreign airline unless DOT determines that the airline is not establishing itself in a particular country just to avoid regulations. The bill would also require DOT to ensure that any new foreign air carrier permits issued to European airlines are consistent with the fair labor standards and competition requirements of the U.S.-EU-Norway-Iceland Air Transport Agreement.
The damage caused by flag-of-convenience schemes isn’t just theory or supposition. We’ve experienced their destructive effects firsthand, with another once-iconic American industry paying the price. In 1955, more than 1,000 U.S.-flagged maritime vessels carried 25 percent of the world’s tonnage. Then ship owners began to register and “flag” their vessels in countries that offered the least restrictive laws governing their crews, taxes and other aspects of their business. As a result, the U.S. maritime shipping industry all but collapsed, and today accounts for just 2 percent of world tonnage.
With the airline industry, we can’t afford to ignore the past or the writing on the wall: Other carriers are already watching and looking to replicate NAI’s business model – with recent reports indicating that both SAS and Air France are interested in pursuing a similar path.
NAI’s “flag-of-convenience” business model not only will destroy thousands of middle-class American jobs, it also runs counter to efforts by hundreds of thousands of U.S. aviation workers to ensure that our industry provides the highest level of safety and security standards for our passengers across the globe.
And here’s what is really scary: Consumers likely don’t know the difference. They may have seen NAI’s ads for their new routes, which trumpet dirt-cheap fares – but make no mention of the corners the airline cuts on labor, safety and regulations to make those fares possible. They just see cheap tickets, never realizing that they may come at the price of increased safety risks.
The Trump administration has a chance to stop this global race to the bottom before it starts. At a time when American jobs and American workers are in the spotlight thanks to President Trump’s “buy American, hire American” philosophy, the president and his administration must stand up to any efforts to undercut American workers with cheap foreign labor.
If NAI’s foreign carrier permit is not revoked and this business model is given tacit approval by U.S. regulatory authorities, more airlines will follow NAI, putting in jeopardy the wages and benefits of Americans who work every day to provide airline passengers the highest levels of convenience, safety and security.
A bipartisan group of our elected representatives understands the extremely dangerous precedent we’re setting here. The clock is ticking for action, however, as NAI begins flights in the U.S. this month.
Captain Dan Carey is President of the Allied Pilots Association, the largest independent pilots union in the United States representing the 15,000 pilots of American Airlines, the world’s largest passenger airline.
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