Tuesday, June 10, 2014

Protectionism rears its ugly head yet again

This time it's airline pilot and cabin crew unions, along with major US airlines, who have joined forces in trying to prevent upstart airline Norwegian Air International from offering deeply discounted travel between Europe and the USA.

Although NAI has the right to fly to the U.S., it first must obtain formal authorization from the Department of Transportation. NAI submitted its application in December and completed all DOT requirements in February, when it received its air operator certificate. This is where the airline is encountering some rough weather.

In an email to The Daily Signal, a spokesman for the Air Line Pilots Association International, which calls itself the world’s largest union of airline pilots, identified more than 100 members of Congress who have “weighed in with the DOT against NAI’s application for a foreign air carrier permit.”

. . .

If the lobbying efforts against NAI by the pilots union and three major U.S. airlines are successful, U.S. consumers and workers will lose out, Norwegian spokesman Lasse Sandaker-Nielsen told The Daily Signal.

“Our opposition is delaying the process,” Sandaker-Nielsen said. “This is outrageous because we have fulfilled our obligations under the Open Skies agreement.

The airline’s spokesman added: “It’s ironic that elected officials in a country where capitalism and the free market are celebrated are not making a decision based on the facts that show how we are bringing in competition, lowering prices and creating jobs. The Obama administration has been pretty outspoken about the fact that it wants more tourism coming to the U.S., and this is what we are doing.”

. . .

James Sherk, a labor policy analyst with The Heritage Foundation, said consumers need to be on the lookout for an anti-competition move on Capitol Hill that would put everyday Americans at a disadvantage while rewarding entrenched interests.

“Norwegian Air’s entry into the international flight market would reduce the monopoly profits of the existing airlines and pressure their unions to make concessions to reduce costs and keep customers,” Sherk said, adding:

“Neither labor nor management at incumbent airlines want that to happen. They would rather have the government shut down their prospective competitor rather than have to earn their customers’ business with better services at lower cost. If successful, they will keep international flight an expensive luxury outside the budgets of many middle class families.”

There's more at the link.

The discounts are pretty good, too.

Compare flights offered by the established transatlantic carriers out of the United States—namely United Airlines, Delta Air Lines, and American Airlines—against the service Norwegian launched last year.

On American, for instance, a round-trip ticket June 2 and 9 from New York-JFK International Airport to Oslo costs about $1,440. The same flight on Norwegian?  Around $862. That’s a $578 difference.

Again, more at the link.

You bet I'd like a 40% discount on transatlantic air travel - but as far as the established airlines and staff unions are concerned, protecting their own interests is more important.  Given the pro-union disposition of the Obama administration, I suspect Norwegian Air International is going to encounter some pretty stiff legal and regulatory headwinds . . .



Coconut said...

Seem to recall middle-eastern airlines are cheap too.

Something about how you can save piles of dosh by selling your 'planes to an african airline once the lack of anything approaching maintenance makes even "inshallah" insufficient to get your countrymen to climb in.

Though wasting less money than a union-infested American company wouldn't be too hard.

I really don't get it; unions sound like a good idea, and they certainly did some good early in the last century, but it's like they have a reverse Midas Touch now, where everything they come in contact with turns horrible.

Sendarius said...

Good service at American Airlines appears not to exist, in my experience. I have flown with them four times.

They lost my checked luggage every time - once, they never found it.

R227224, Garfath. S. Sgt. RAAF. (retd.) said...

Coconut, you have hit the nail right on the head!.
Essentially, Unions are living in the past, to preserve benefits and entitlements that now OTHER PEOPLE have to pay.
These unions closely resemble, or are, the modern equivalent of the old, corrupt alliances of money and Political Power that they themselves were created to destroy.
As for my country, Australia, I urge that the following book be read.
Australia's Secret War.
How Unions Sabotaged Our Troops in World War II.
By Hal G. P. Colbatch.
ISBN 9780980677874.
As a former Serviceman, I was not surprised, but still livid as I read the contents.
Now I know why my Mother and Father DESPISED unionists, Dad was a Merchant Seaman, east coast Australia, to New Guinea and the islands.
Mum told me that Dad had come home one night, - they lived less than a mile from Sydney Harbour,- and he said that there were Bren Gun emplacements on the wharves, exactly where now, modern day tourists walk.
We came very close to that once again, in 1968, when the wharfies refused to load two ships, the Japarat and Boonaroo, that took supplies to our troops in Vietnam.
Unions, except for the RARE few, just bloody oxygen thieves!.