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Are the ALPA & US-Based Airlines Playing a Game That They Can’t Win?

The test pilots exit the 787-9. Image: Bernie Leighton - AirlineReporter.com

Two U.S. pilots stepping off the first 787-9 at Boeing Field – Photo: Bernie Leighton | AirlineReporter

With the Emirates Milan saga, where US & Italian airlines are backing a play to force the Gulf carrier off the Fifth Freedom New York route, it led me to look into similar instances that have happened over the last few months that perhaps lead to a deeper situation.

It seems that US-based airlines and the Air Line Pilots Association (ALPA) are trying their hand at stopping outsider airlines from getting to the United States rather than just expanding themselves.

Let’s take a closer look.

Image: Boeing

The new 777X signed for Emirates – is ALPA trying to stop the big sales internationally? Image: Boeing

As Emirates fights to keep the Milan route, ALPA has been taking other shots at the Gulf carriers that make you wonder just what they are up to.  In early April, ALPA put out a press release encouraging the US government to stop using the US Export Import (Ex-Im) Bank to fund the expansion of international airlines.

What is the Export Import Bank?  Well, the best explanation comes from Brett over at Crankyflier, but to put it simply the Ex-Im Bank helps fund the export of US goods to international buyers.  Have a lovely shiny new American-made aircraft you want to sell to the world?  These are the guys to speak to. But the reason why the Ex-Im bank is so important is that they are backed by the US government.  Really, whatever the Ex-Im bank is supporting is more like what the US government is supporting.

So, when ALPA asked the government to “take a good look” at what the Ex-Im Bank is doing to American jobs when they are helping fund the sale of aircraft to international-based carriers, what they really mean is “What you think is a good thing, is really taking away airline jobs… stop it!”

When did ALPA start doing this?  Well, it may have been in the new year, after a raft of orders for the 777X to international airlines were announced, and many of those were going to Gulf-based carriers.

It seems that ALPA is not only trying to stop the expansion of the the Gulf carriers, but European ones as well.  One of the early recipients of the 787 was Norwegian Air International (NAI).  In 2013, they received their first 787s and shortly began their international expansion with flights to New York, Fort Lauderdale, & Bangkok.  They soon expanded the reach from their aircraft base in Oslo to other cities in the USA, and announced they want to introduce transatlantic service between the US & Europe/UK.  Before they could start those flights, Norwegian started to change the way their business was structured.

Photo by Bernie Leighton. CLICK FOR LARGER

The Boeing 787-8  is the aircraft NAI is banking their longhaul strategy on – Photo: Bernie Leighton | AirlineReporter

Since Norway is not part of the EU, they don’t have access to the Open Skies agreement.  The easiest way to fix that would be to have an airline based in the EU, right?  That is what NAI did, by registering and applying for an Air Operators Certificate (AOC) in Ireland.  They chose Ireland since the majority of NAI’s aircraft are registered in this EU country, and they wouldn’t be the only airline that does that.

All of Alitalia’s current fleet are in the progress of being swapped from Italian registry to Irish to make business easier with their leased aircraft (apparently Italian law is convoluted, and since they can’t make up their own mind as it is, who knows what they would do when an aircraft needs repossessing).

So if Irish law is fairly easy in regards to registering an aircraft, why not register your whole airline there?  By doing this, NAI has opened up their airline within the EU, and have already started operating flights for their Norwegian-based parent company.  Confused yet?

Well, to make things worse for your brain, Norwegian Air wants to open up a crew base here in the USA, allowing them to use American crews, on Irish-registered aircraft, based in Europe (either UK or Norway), and operating flights for a Norwegian airline that is headquartered in Ireland.  I think my head just exploded!

But, of course, this is where ALPA comes in. They don’t like the idea of US crew working for an international airline (at bargain pay).  They think that because NAI has worked around the laws of its own country they have an unfair advantage over the US-based airlines.  By appealing to the DOT to reject the application for the flights, they are fighting to keep quality US jobs here in the USA, and keeping the American skies… American… patriotic, right? Well, the ALPA’s responsibility is to protect their 50,000 pilot members.

Norwegian Air's first Boeing 787 Dreamliner. Image from Norwegian.

Norwegian Air’s first Boeing 787, registered in Ireland but based in Norway – Photo: Norwegian Air International

Norwegian Air wants to expand their operations to additional cities in both the US & Europe.  Opening up more cities to extra flights should bring jobs and money, not just to the airline, but to anyone affiliated with tourism businesses, plus the trickle-down effect.  Even though NAI is a low-cost carrier, that doesn’t mean that everyone who flies them is doing so for leisure purposes.  Opening up the skies to more airlines means more competition, and thus lower costs.  How does NAI think they can make this work? Well with a US crew and state-of-the-art Dreamliners, they believe they can make it work.

As the US Airlines & ALPA fight to keep jobs and money here in the USA, are they also cutting off their nose despite their face?  Is the blocking of US exports to Gulf airlines a smart move, or is it going to hurt the US in other areas if they are successful?  Who is going to be on the winning side is yet to be seen, but who should that be?  Perhaps you have an opinion on who is doing the right thing here?

  Malcolm Muir – Managing Correspondent

Mal is an Australian AvGeek now living and working in Seattle. With a passion for aircraft photography, traveling and the fun that combining the two can bring. Insights into the aviation world with a bit of a perspective thanks to working in the travel industry.

 @BigMalX | BigMal's World | Photos

10 comments to Are the ALPA & US-Based Airlines Playing a Game That They Can’t Win?

  • Mike

    Good ole’ ALPA – Always Leading Pilots Astray…

  • John

    The ALPA is one of the biggest reasons for weakening the airline industry. They believe airlines should be not for profits. The ability for pilots to strike should be removed. While I agree there are many airline upper management personnel that are overpaid and don’t now how to run an airline, the pilots are the same way. They make their airlines anti-competitive and they win the battle but ultimately lose the war. Ask Eastern or Pan Am or some of the others that could not keep up with excessive pilot costs.

  • John Doe

    @John-
    What is the value of 400 lives? or even 200 lives?
    If a pilot makes a mistake, hundreds of lives are lost in an instance.
    Do you want the cheapest pilot when your family is flying?

    Are you an airline pilot?

    • John

      I am not a pilot. So you are saying a pilot making $100,000 is a worse pilot than someone making $300,000? I do know business and the concept what a customer will pay. As the pilots keep demanding more, the product is no longer viable. In order to make money on a flight the tickets have to be priced so high that travelers will stay away. There are a lot of VERY good young pilots that would be very happy to make half of what the prima donna pilots demand.

  • John Mac

    John,
    Quite simply in life “YOU GET WHAT YOU PAY FOR”. Go ahead pal put your wife and kids on an airline where the pilots are overworked, underpaid, and pissed off. I hope they get to their destination. Good luck with that. If you cant pay for it maybe you ought to stay home!

  • Groggo

    Mal,
    You have touched on a variety of subjects without a real analysis of any of them. Also you have made drawn some inferences which are just wrong. With respect to some of the comments above, clearly there are other agendas which are not a part of this conversation. I will say that I doubt Mike or John have much insight into what ALPA is, or what ALPA’s goals are. If airlines don’t have profits, then airline pilots don’t have jobs. Nobody, and especially after the last ten years, NOBODY understands that better than an airline pilot.

    As to the Ex-Im bank, you miss the point. ALPA has no interest in “keeping Emirates out…”. ALPA has a strong interest in a fair and level playing field, where the rules are the same for all players. The Ex-Im Bank amounts to a US taxpayer subsidy to foreign carriers to reduce the cost of the airplanes they buy from Boeing. It is one thing to compete against a cheaper product made overseas, it is an entirely different thing if that product is cheaper because the US Government spends US taxpayer dollars to subsidize that cheaper product which that very same taxpayer then has to compete against. THAT is why ALPA STRONGLY disagrees that the Ex-Im Bank be should be allowed to subsidize aircraft sales. Unless those same terms are provided to US carriers for the purchase of airplanes, then all of us taxpayers are supporting companies which compete against your neighbors and friends whose businesses are put at risk as they compete against a company financed BY OUR OWN TAX DOLLARS.

    In addition, that same government levies more taxes on our Airline Industry than it does on cigarettes and booze. The Mideast carriers are supported by the (bottomless) treasuries of those Mideast countries. Of course, that money comes from the profits of an OPEC controlled oil industry, but let’s leave that alone for the moment.

    Now, on to NAI. When you mentioned that NAI wants to use American crews, you demonstrate a typical modern american trait (too long in Seattle?). You are demonstrating that you have (some) information, but no knowledge or understanding. Knowing a fact does not give you an argument, understanding where that fact falls in the full picture of a subject does. NAI has talked about hiring a handful of flight attendants in New York and Orlando. The vast majority of their crews will be on contract to a company in Singapore, they will be based in Thailand; and they will not be allowed to organize or have representation. The real reason companies are relocating to Ireland is that the Irish, desperate to rebuild their economy after the last 30 years of economic disaster, started with call centers and have worked their way up to eliminating many of their labor laws and other restrictive corporate regulations.

    There is a separate conversation to be had about the appropriate level of governmental oversight of labor and corporate behaviour, but I think we can all agree that our modern society owes many of it’s beneficial aspects to the advancement of the balance of power between labor and capital over the past 120 years. In fact, we have a great example in front of us of what a world without that 120 years of effort looks like. At the turn of the last century, with no restrictions on the few concerning how the many could be treated, John D. Rockefeller was worth (in 2014 dollars)over 21 Trillion dollars; with a T. Carlos Slim, Warren Buffet, and Bill Gates are pikers by those standards.

    An even better example is Putin’s private game reserve, popularly known as Russia. In the post cold war wild, wild west that is today’s Russia, 35% of the the total of all of the assets in the entire country are owned by, wait for it, 110 individuals. We now call these people “Oligarchs”; it’s a new word for an old problem.

    ALPA’s goals are nothing more or less than adhering to the dream which we as a country committed to on a hot day in July, 1776. The idea that there will be no special deals, that we will not allow our society to be broken into classes which are treated differently, and that the rule of law will apply to all; equally and without amendment, was a radical idea at the time. To some, it is still a radical idea which threatens their ability to manipulate the power of our society to the purposes of a select few. We at ALPA fully intend to see that threat carried out in the People’s House, and the Senate; even if the politicians have been bought.

    I hope this clears the issue just a bit.
    Cheers,

  • Josh

    I am a NAI flight attendant, hired under american contract and base in Fort Lauderdale, Florida. NAI meets all the requirements to get the aproval from DOT. ALPA is using excuses with no wat to prove any of what they say, this has become so ridiculous at this point. We are more than 300 american citizens hired and based here in the US by Norwegian waiting anxiously for our aproval to start operating all our routes.

  • Scott

    It is always stunning to me when someone writes an article about a topic they know so little about. No one cares what jobs are outsourced to lower paid overseas workers until it is your job.

  • NOT GROGGO

    It keep surprising me the statement coming up here about something they do not know much about. Especially Groggo, which actually make me more groggy by his somewhat know how about the whole situation.

    Oki to know the facts you need to know your source. You say that crew will mainly be on a contract in Singapore and be based in Thailand. How many flightattendants and pilots do you know that actually work in NAI.

    Some truth is there though and that is that some of the crew have choosen to be based in Thailand but as for now crew can more or less choose the base, based on operational needs. Basically the Scandinaviavn bases or Bangkok for those who wants to.

    The crew are also allowed to be organzed and represented as many already are. NAI employs crew locally meaning, most pilots will come from European Airlines as they require a EASA license, they will also hire US flight crew as well, however they would probably need to to a conversion which is required in most companies based a different place from the respective places of pilots.

    Pilots in NAI is not paid on the low scale, in fact much more than most pilots get paid in US. Take the regional pilots in US and see the aveerage salary, does this low salary make them worse pilots than others. Well the salary put in by NAI is decent but of course not like the guys on Wallstreet.

    NAI is also hiring US pilots (http://www.latestpilotjobs.com/jobs/view/id/821.html), and for those interested try this link. And if you need to do a conversion then have a look at http://www.bristol.gs and things will smooth.

    In any case the crew in Norwegian is from all over Europe, Spain, UK, Ireland, France, Netherland, Germany, Finland, Sweden, Norway, Denmark, Italy just to mention a few countries. http://www.latestpilotjobs.com/jobs/view/id/821.html

  • Carlos

    I am one of the US Flight Attendants hired by NAI based in Fort Lauderdale. To tell you the truth I have been flying for 14 years as a flight attendant and the training I had to go through for NAI was more intense than any other training I have been through in a US carrier from having to demonstrate that I can swim 200 meters to evacuations. If some of these training aspects were incorporated into the US carriers half the flight attendants would fail. I even had to go through an intense physical and if I didn’t pass that physical I don’t fly. NAI hired us at competitive wages. Higher than I have started at any us carrier as a matter of fact. $3.61 higher starting paythanat a US carrier and I have worked for some of the big boys including DL and AA. Yes we’re contracted but the company is based in Norway not Thailand like ALPA wants people to believe. We do have Thai crews working the flights but that is just until NAI finishes the training for the US cabin crews.
    The EASA and CAA regulations are much more stricter and less lax than FAA rules. So as for safety EU regulations are more stricter than anything I have ever seen. Also we talk so much crap but yet why do you think pilots are flocking to European carriers because theory and benefits are much better than here in the US unfortunately and ALPA is not liking that. I say ALPA needs to stop their crap and focus more on what their own company’s are doing instead of what other companies are doing.

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