Norwegian Air International is a rather weird company.
It is based in Ireland (even though it doesn't have any flights there). The pilots
are from several Asian cultures primarily from Thailand. And they currently have
flights from New York, California, and Florida that depart for across the pond
and land in Scandinavia, Africa, and Asia.
United States carriers and even the Department of
Transportation are against the idea of opening up more routes within the United
States in part because they don’t want NAI’s low prices to affect the aviation
market but mostly they are against it because of safety. Because the NAI is
registered in Ireland they are not subject to many of the same safety rules
that are present in both the United States or even in Norway. Also the pilots
that they are hiring are not subject to the same safety checks that American or
other pilots have to go through such as annual flight reviews.
The DOT has even recently denied the NAI to open more
routes in the United States. The main
causes were the fact that the NAI wanted to be exempt from U.S. air regulations
and follow their own rules, they also felt that the unfair price difference
would force some small air carriers out of business. They also felt that the
way the NAI ran their airline and its unusual creation was considered unsafe. These
feelings were even felt in Europe and many European companies agreed with the
U.S. DOT stand against NAI. Personally I am glad that the DOT shut down this
proposal, while I feel that many airline ticket prices are rather expensive I still
feel glad that there is some fair competition out there. It is also nice
because the American carriers can still be around and hire American pilots.
If the NAI is able to get more routes in the U.S. it
could completely destabilize the industry. Due to their low prices other major
airlines like Delta would be forced to lower their prices. If this happens Delta
would not be able to support their large fleet and would eventually have to go
into bankruptcy. This is what would happen to most of the major airlines. Some of
the smaller air carriers such as Southwest might still be able to survive
however they would need to change their policies fairly quickly in order to
keep up with the competition.
For more info on NAI check out these links:
http://www.politico.com/story/2014/09/department-of-transportation-denies-norwegian-air-international-permit-110536.html
http://www.usatoday.com/story/travel/flights/2014/09/02/dot-norwegian-air-alpa-foxx/14810499/
http://www.norwegian.com/us/
For more info on NAI check out these links:
http://www.politico.com/story/2014/09/department-of-transportation-denies-norwegian-air-international-permit-110536.html
http://www.usatoday.com/story/travel/flights/2014/09/02/dot-norwegian-air-alpa-foxx/14810499/
http://www.norwegian.com/us/
Its a scary thing when no one is there to oversee and regulate what goes on with flight training, maintenance, and the overall operation of an airline. I have a hard time imagining Irish aviation authorities are going to be traveling all over the world to make sure NAI isn't doing anything illegal.
ReplyDeleteLooking at the other side - if the FAA deemed NAI as "safe" and the DOT approves, could this business model actually encourage efficiency in the US carriers?
ReplyDeleteI agree with your view about NAI coming over and basically putting the major domestic airlines out of business. Its scary to think the only thing stopping this is the DOT not allowing them to come into this country and fly. Hopefully some sort of law can be passed that can ensure that major domestic airlines are not potentially affected by this type of foreign company.
ReplyDeleteI also read that some of the European Airlines were opposed to Norwegian Air. British, Lufthansa, and Air France were opposed to it and they all have Trans-Atlantic routes. I wonder if the European Union has made any attempts to holt Norwegian Air’s expansion.
ReplyDeleteFirst off, love the title, gave me a good laugh. I think it is very odd to be called Norwegian, yet have so many other countries operating under the name. If NAI was able to get more routes then not only would companies risk bankruptcy but pilots pay would be severely cut.
ReplyDeleteNAI is based in Ireland because the tax rates for corporations are 12.5%(trading income) or 25%(non-trading income). In the US corporations are taxed between 15% and 30% which at a few hundred dollars isn't much but once you get into millions, that 2.5-5% can mean that the companies profits are a few million higher than they would be here in the US.
ReplyDeleteI'm not sure it would put the major airlines out of business but it would definitely have a major impact on them. I'm sure the US isn't the only one that is reluctant to accept NAI and hope that they will stick to it and not allow companies like NAI to take over the industry.
ReplyDelete