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$75. That’s how much flights between the United States and Britain are expected to cost thanks to Norwegian Air. The low-cost carrier already offers transatlantic fares at a fraction of the cost of its American rivals. The new pricing scheme, which goes into effect this summer, pares those prices down ever further. The move is part of Norwegian’s plan to shake up the air travel market and establish a stronger American presence.
Standing in its way however, is the U.S. airline industry. Although Norwegian has governmental approval to fly into the U.S., the Trump administration is being lobbied to revoke Norwegian’s flying permit. U.S. carriers and their allies accuse Norwegian of using a business model that is “not in the public interest” and skirts labor laws.
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That model is unusual to say the least. While headquartered in Norway, the airline is based in Ireland. Pilots are hired through a Singapore-based recruiting firm and operate out of Thailand. The reason is cost. Ireland offers more favorable tax rates compared to Norway. And hiring crew on Asian rather than European work contracts holds the company accountable to a lower wage standard.
These practices, we are told, give Norwegian an unfair cost advantage, undercutting wages and threatening American jobs. The Air Line Pilots Association, which has launched an opposition campaign, argues that Norwegian’s employees get “substantially inferior” compensation and labor protections. But wait. Haven’t U.S. carriers resorted to similar tactics over the years?
During the early part of the decade, many of these carriers were under pressure to cut costs. Their solution? Hire sales and reservation staff in countries like Guatemala, Mexico and the Philippines where salaries are considerably lower than in the U.S. Delta Airlines reportedly saved $25 million annually by shifting its call centers to India. The airline only reversed course after angry passengers demanded better English from Indian customer service agents.
More recently, United Airlines outsourced over 600 jobs—like baggage handling and check-in—to cheaper local contractors, contractors that often don’t provide employees with health coverage or travel benefits.
And then there’s airplane maintenance. Airplanes, like cars, require routine inspection for wear and tear. And U.S. airlines have increasingly opted, for cost reasons, to have these inspections done abroad. Southwest uses a maintenance facility in El Salvador; Delta overhauls its planes in Mexico; and American and United use shops in China. Employment contracts in each of these countries offer local workers less compensation and labor protections compared to those seen in the U.S. Sound familiar?
Norwegian’s modus operandi does raise interesting questions. Should a carrier established in one country be allowed to offer wages typical of another? And should airline employees be given the same labor protections regardless of where they are located? The U.S. airline industry, however—with its history of wage cuts and outsourcing—can hardly be relied on to provide impartial answers.
Besides, American jobs don’t need protection. Rather, as consumer advocate Christopher Elliot aptly notes, “they need to be subjected to the intense crosswinds of international competition, where they will either prove themselves or fail.”
$75 dollars to fly to Britain? Sign me up.