The Wall Street Journal | European Union Says U.S. in Breach of Aviation Pact

EU Still Deciding on Potential Action After Claiming U.S. Breaches Open-Skies Deal

By DOUG CAMERON And ROBERT WALL

European Union representatives said the U.S. has breached a landmark aviation treaty between two of world’s biggest aviation markets by taking too long to process a controversial effort by a Norwegian airline to expand its trans-Atlantic services.

It is the first time either side has declared a breach of their 2007 open-skies aviation deal that took more than a decade to negotiate. The pact lifted most of the barriers on trans-Atlantic flying and included provisions for cooperation on enforcing competition and safety rules.

The move escalates a simmering dispute over plans by Norwegian Air Shuttle AS to establish a new long-haul operation in Ireland and fly to the U.S. and Asia. The plan has attracted fierce opposition from a coalition of airlines, unions and lawmakers on both sides of the Atlantic.

Officials from the European Commission met with their U.S. counterparts last week to discuss the issue, but left frustrated that the U.S. Department of Transportation hasn’t provided a timeline for ruling on the application lodged by Norwegian Air in February, according to people briefed on the closed-door event.

“The European Commission considers that there is a breach of the EU-U.S. air transport agreement by the U.S. authorities, regarding the application from Norwegian Air International to fly to the United States,” said a Commission official this week. “The U.S. authorities are taking too long to process the application and this delay is not compatible with the EU-US agreement.”

The EU argues the treaty requires the U.S. to promptly grant traffic rights, as it has done before. Similar applications typically have taken two or three months to process.

Commission officials said they have yet to decide what, if any, action to take against the U.S. The two sides are due to discuss the issue again at a previously scheduled meeting next month.

The aviation treaty includes scope for binding arbitration, a move that would likely attract opposition from critics of Norwegian’s plan who want the U.S. to turn down its application.

The U.S. State Department, which negotiates aviation treaties, confirmed the Norwegian case was discussed last week, but declined further comment. The Transportation Department has declined all comment while it is assessing Norwegian’s application.

Opponents argue Norwegian Air, which operates Europe’s third-largest low-cost airline, is trying to circumvent European labor laws by registering aircraft in Ireland, even though it wouldn’t fly from that country, and hiring staff at local bases in Europe, Asia and the U.S. Eurocockpit, a group representing pilots, said Tuesday the Norwegian carrier was seeking to “exploit loopholes in EU legislation.”

Norwegian Air, backed by some other airlines and consumer groups, said its expansion would boost competition and that its decision to seek a license in Ireland wasn’t driven by a desire to secure cheap labor, citing better airline-traffic rights than in Norway and more attractive aircraft-financing rates.

View the Article