Legislation Intended To Protect The U.S. Aviation Industry And Jobs From Unfair International Competition

The Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), Chair of the Subcommittee on Aviation Rick Larsen (D-WA), Vice Chair of the Subcommittee on Aviation Sharice Davids (D-KS), Ranking Member of the Subcommittee on Highways and Transit Rodney Davis (R-IL), and Congressman Drew Ferguson (R-GA) introduced bipartisan legislation on Wednesday to prohibit the U.S. Department of Transportation (DOT) from issuing a foreign air carrier permit for U.S. operations to an airline that exploits a “flag of convenience” to avoid the regulations of its home country, or otherwise undermines labor standards.

Specifically, this legislation requires DOT to ensure that any new foreign air carrier permit issued to a European airline is consistent with the fair labor standards and fair competition requirements of the U.S.-E.U.-Norway-Iceland Air Transport Agreement. In addition, this legislation prohibits DOT from issuing a permit to any foreign airline to serve the United States unless DOT determines that the airline is not exploiting a “flag of convenience” by establishing itself in a country other than the country of its majority owner to avoid regulations or otherwise undermining labor standards.

Last Congress, Chair DeFazio introduced a similar bill after DOT, in December 2016, issued a foreign air carrier permit to Norwegian Air International (NAI). NAI is “Norwegian” in name only, having established itself in Ireland to avoid Norway’s strong labor protections and employing crews on cheap short-term contracts governed under Singapore law. DOT’s controversial decision to grant NAI a permit will encourage future opportunistic airlines to continue this race to the bottom in international civil aviation, threatening U.S. carriers’ ability to compete in critical international markets.

“Our bill ensures foreign airlines seeking to serve the United States play by the rules. Today, foreign airlines can set up under a flag of convenience to exploit weak labor laws in other countries in order to save money and undercut competition. And across the globe, there are attempts by foreign airlines to undermine important labor standards to get ahead. This bipartisan bill protects American jobs from predatory and unfair competition, and it protects the American flying public from deception,” said Chair DeFazio.

“Looking at the future of aviation and aerospace means improving the nation’s competitiveness in the global market. The bipartisan Fair and Open Skies Act says to the world that the U.S. will not reward countries that break their commitments to protecting workers,” said Chair Larsen. “I am proud to support the best aerospace and aviation workers in the world and ensure the U.S. remains competitive in the international market.”

“Foreign airlines serving the United States must follow the rules of our country, including our fair labor standards and competition requirements, to ensure the safety of passengers and U.S. airline industry workers. I’m glad to join my colleagues in introducing this bipartisan legislation to protect the American flying public and prevent foreign airlines from gaming the system,” said Vice-Chair Davids.

“Foreign airlines need to play by the rules or they shouldn’t be permitted to operate within the United States,” said Ranking Member Davis. “Ignoring when they skirt regulations or labor standards in their home country only puts American workers and companies at a disadvantage. If a foreign air carrier wants to operate within the United States, then they need to play by the same rules we require of our airlines.”

“Foreign carriers serving American cities should follow both the letter and the spirit of the rules. Circumventing these rules allows foreign carriers to exploit cheap foreign labor and, at its worst, risks the safety of passengers. This bipartisan legislation levels the playing field to protect American jobs and the safety of the American flying public,” said Congressman Ferguson.

“ALPA has long opposed foreign airlines serving the United States with flag-of-convenience business models, which base different operations around the globe to avoid taxes, labor laws, and safety regulations and put U.S. airline workers at a serious competitive disadvantage. We are grateful to Reps. DeFazio, Larsen, Ferguson and Davis for their continued leadership in helping to enact legislation that provides strong action to defend U.S. trade deals and protect fair competition for U.S. airline industry workers,” said Captain Joe DePete, Air Line Pilots Association President.

“U.S. aviation makes it possible to connect us to the rest of the world, and each of our communities at home from big cities to small town America. Our economy, our military, and 12 million U.S. jobs depend on U.S. aviation. It only makes sense then that we codify opening access to foreign airlines only if everyone plays by the rules that makes Open Skies fair. Flight Attendants applaud Chairman DeFazio, Chairman Larsen, Representative Ferguson, Ranking Member Davis, and Representative Davids, who are working to protect our jobs and a strong U.S. aviation industry,” said Sara Nelson, Association of Flight Attendants - CWA President.

"We saw what happened when the flag-of-convenience business model was introduced into our maritime industry. A once vibrant sector of our economy is now a shell of what it used to be. We cannot and will not allow the same thing to happen to our aviation industry," said Larry Willis, president of the Transportation Trades Department, AFL-CIO (TTD). "By requiring foreign air carriers entering the U.S. market play by the rules and don't pursue predatory flag-of-convenience schemes, this legislation will uphold the integrity of our aviation industry, ensure fair competition in this sector, and protect the good jobs millions of frontline aviation workers rely on."  

Organizations supporting the Fair and Open Skies Act include:

• AFL-CIO;
• Air Line Pilots Association;
• Allied Pilots Association;
• Association of Flight Attendants-CWA;
• Association of Professional Flight Attendants;
• Coalition of Airline Pilots Associations;
• International Association of Machinists and Aerospace Workers;
• International Brotherhood of Teamsters;
• International Brotherhood of Teamsters Local 1224;
• International Organization of Masters, Mates & Pilots;
• NetJets Association of Shared Aircraft Pilots;
• Southwest Airlines Pilots Association;
• Transportation Trades Department, AFL-CIO;
• Transportation Workers Union; and
• UNITE HERE.

(Source: House Transportation Committee news release)

FMI: Bill Text