Bart Jansen

USA TODAY

WASHINGTON – The Transportation Department agreed Friday to allow Norwegian Air International to fly to the U.S., in a decision that domestic airlines, their unions and some lawmakers opposed as unfair competition.

The unit, a subsidiary of European low-cost carrier Norwegian Air Shuttle, had applied in December 2013 to serve the U.S. The parent carrier established routes at several U.S. airports with Boeing 787 Dreamliner aircraft and hundreds of locally hired workers while awaiting the decision.

But U.S. critics, including American, Delta and United airlines, and the Air Line Pilots Association, argued that Norwegian was trying to skirt labor and safety laws, by being headquartered in Ireland and potentially hiring Asian crews for below-market wages.

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The department gave tentative approval in April and finalized the decision Friday.

“This case is among the most novel and complex ever undertaken by the department,” Jenny Rosenberg, acting assistant secretary for international affairs, wrote in the nine-page decision. “Regardless of our appreciation of the public policy arguments raised by opponents, we have been advised that the law and our bilateral obligations leave us no avenue to reject this application.”

In direct reference to concerns about hiring and employment practices, the decision said the airline CEO offered "a number of voluntary practices" to address the concerns.

Roger Dow, CEO of the U.S. Travel Association, said the travel community was "ecstatic" at the decision.

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"There is zero downside to allowing more low-cost carriers into U.S. airports: it's a policy that's good for consumers, stupendous for U.S. economic and job growth, and even good for U.S. airlines because it broadens the market for domestic connector flights," Dow said. "More choices for American travelers and more capacity to bring foreign visitors and their dollars to U.S. shores is the unimpeachably correct decision, period."

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Critics were outraged at a decision they warned could allow airlines to mirror the shipping industry, where companies organize in countries with the least-onerous regulations. The opponents cited language in the policy called an Open Skies agreement between the U.S., the European Union and Norway, which says “opportunities created by the agreement are not intended to undermine labour standards or the labour-related rights and principles," but the DOT decision found that that didn't block approval of the flights.

“DOT’s decision has guaranteed a race to the bottom in our transatlantic aviation market,” said Rep. Peter DeFazio, D-Ore. “Norwegian is a virtual airline, set up under a flag of convenience to exploit weak labor laws in other countries like Singapore, save money, and undercut competition.”

The criticism was bipartisan. Rep. Frank LoBiondo, R-N.J., also called the decision a “slap in the face.”

The Association of Flight Attendants-CWA condemned the decision as a double-cross of U.S. workers.

“It is a betrayal to hundreds of thousands of aviation workers,” said Sara Nelson, the union president. “This decision puts a rubber-stamp of approval on the ‘flag of convenience model’ that destroyed over a hundred thousand U.S. shipping jobs.”

Capt. Tim Canoll, president of the pilots' union, said the group "is considering all options to reverse this action."

“This flawed action is a lasting legacy of the Obama administration and demonstrates an egregious lack of support for working men and women in this country," Canoll said. “This decision is an affront to fair competition and will ultimately result in the loss of U.S. jobs and, potentially, significant losses for the U.S. international aviation industry."

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But Norwegian airline officials strongly objected to being characterized as cutting corners on safety or labor regulations. Bjorn Kjos, CEO of Norwegian Group, has said the approval would be a “win-win” for consumers and the economies on both sides of the Atlantic. The company said its flights would benefit economies on both sides of the Atlantic, after ordering $18.5 billion of 787 and 737 aircraft.

Airport groups in Oakland, Orlando, Fort Lauderdale and Washington, D.C. each urged approval of the application to gain more international flights.

John Byerly, a former State Department official who helped negotiate the Open Skies agreement that allowed the application and who is now a consultant for Norwegian, has said airlines and unions were just trying to prevent competition on trans-Atlantic flights.

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