Monday, January 20, 2014

Ireland -- the Liberia of air travel

Wall Street Journal on the plans of Norwegian Air to offer low-cost transatlantic service --

Airlines, labor unions and some lawmakers have called on the U.S. to block Norwegian Air Shuttle's expansion as they say the airline's business model, which involves the registration of its aircraft in Ireland and hiring of staff at local bases in Europe, Asia and the U.S., is an attempt to circumvent Norwegian labor laws and set a precedent for airlines to use shipping-style "flags of convenience" to cut costs ...The airline, which operates long-haul flights from Oslo, Stockholm and Copenhagen to New York, Bangkok and Fort Lauderdale, Fla., wants to add flights to Los Angeles, Oakland, Calif., and Orlando, Fla., from Scandinavia as well as from a trans-Atlantic base at London Gatwick airport. To oversee the planned expansion, Norwegian has set up an Irish subsidiary called Norwegian Air International, which needs both an Irish operator license and a U.S. foreign-carrier permit to realize its plans. Both licenses are still pending as the airline's plans are met with resistance in the U.S. 

Now in fairness, the high prices and abysmal service on existing transatlantic routes, especially to smaller markets -- like Dublin! -- surely warrant a new entrant that could at least pair the abysmal service with low prices. But it does seem a tad bold for Ireland to be in this particular form of arbitrage with the bailout barely done. And anyway, the airline isn't proposing to fly from Dublin.