What is it going to take to wake U.S. policymakers up to the fact that our nation’s aviation industry is competing on a very un-level playing field with state-owned and some other airlines?
Today’s announcement by Norwegian Air Shuttle (NAS) underscores the need to recognize the unfair advantages used by some foreign airlines to take markets from U.S. airlines. It’s time for the U.S. government to step in and level the playing field.
The airline said today that it will begin serving three U.S. destinations from London’s Gatwick airport next summer. It will be offering extremely low fares, undercutting U.S. carriers in the market by as much as 50%.
NAS is able to offer these market-distorting fares because of several loopholes in applicable labor law. While NAS is headquartered in Norway, they intend to register their long-haul fleet in Ireland and hire Thai-based flightcrews who will work under Singaporean contracts. Additionally, the planes they’ll be flying have been bought with loan guarantees from the U.S. Export-Import Bank.
While passengers riding NAS might enjoy cheaper fares in the short-term, the unfair competition will drive down revenue at American carriers. This potential race to the bottom could ultimately harm our airline industry and put quality U.S. jobs at risk.
U.S. airlines contribute more than $1 trillion to the U.S. economy and nearly 10 million jobs. Their health and success is a major driver for economic growth.
Policymakers should not be allowing business models like that concocted by NAS to exploit our markets and put U.S. jobs at risk. We need government policy that prevents a race to the bottom in the international air travel market and creates a level playing for U.S. carriers.