DOT’s decision on Norwegian scores one for competition & Open Skies, finally

The US Department of Transportation (DOT) decision to give tentative permission for Norwegian Air International (NAI) to serve the US, more than two years after NAI applied for a foreign air carrier permit, is long overdue.

The April 15 announcement  that NAI “appears to meet DOT’s normal standards for award of a permit and … there is no legal basis to deny NAI’s application” is a coup for the Dublin-based NAI, an Irish-flag subsidiary of Norwegian Air Shuttle. But it’s an even bigger win for transatlantic competition and, most important of all, for Open Skies.

NAI has an Irish air operator’s certificate and applied Dec. 2, 2013, for a foreign air carrier permit to serve the US. DOT’s failure to grant or deny the permit over a protracted time, despite the US-EU Open Skies agreement, made it look, quite frankly, like the US was not upholding its end of the treaty. The treacle-slow process was not only embarrassing, but looked like a desperate attempt to find some legal loophole that could stall, if not deny, the permit.

Several US and European carriers objected to NAI’s application, including American Airlines, Delta Air Lines, Lufthansa, SAS and United Airlines. The deadline for objections to the permit is May 6.. So they still have time, along with the labor groups that have opposed this application, to voice their concerns once more.

But if, as DOT makes clear in its ruling, there is no legal basis to deny NAI a permit, then it’s time to move on and let the market play out. There’s no guarantee of NAI’s commercial success – many are skeptical of the long-haul, low cost carrier business model. But Open Skies agreements are not about guaranteeing business success, they are about guaranteeing market access. They’re about potential jobs and ticket sales for all, not the few.

It seems to me that some of the legacy carriers on either side of the Atlantic have done a convenient repackaging of what that means since they gained their immunized transatlantic joint ventures in one of the world’s most lucrative markets. They acquired great and privileged access as part of the Open Skies deals; now they want to lock out new competitors.

It doesn’t work that way, nor should it.

 

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