Pressure is mounting on US authorities to sanction low-fares flights from Ireland to the US, after the EU triggered arbitration.
But the legal process could take months. Political and business leaders here have welcomed the European Commission’s unprecedented decision to trigger arbitration because of US authorities’ failure to grant Norwegian Air Ireland (NAI) a permit to fly to America from Cork and Shannon.
The Dublin-based airline’s application for a foreign-carrier permit has faced stiff opposition from unions on both sides of the Atlantic, which have claimed NAI will undermine wages and working conditions.
The US Department of Transportation (DoT) tentatively approved the licence in April, two years after NAI’s initial application, but a decision is still awaited.
NAI, a subsidiary of low-fares giant, Norwegian, hopes to launch a Cork-Boston service this year, and a Cork-New York route next year, with plans for routes from Shannon, too.
The Commission said it believes the US DoT is in breach of Open Skies, by delaying a final decision.
A Commission spokesman expects the arbitration to formally begin within weeks. It will involve a panel of three: one designated by the EU, one by the US, and one jointly appointed by the EU and US arbitrators.
If a violation of Open Skies is found, the responsible party is required to comply, or to reach a mutually satisfactory agreement with the other party and within a timeframe.
Ireland South MEP, Deirdre Clune, who called last week for arbitration, welcomed the Commission’s decision.
It will put enormous pressure on US authorities to make a decision on NAI’s permit, she said.
“The NAI application does comply with the Open Skies agreement,” she said. “They are a European airline flying from an Irish base to the US. The fact that the US authorities have left this file sit on a desk somewhere in the US DoT is not satisfactory and a clear breach of the Open Skies agreement.
“The Commission was left with no choice in the case of Norwegian. If the US had honoured the spirit of the Open Skies agreement, we would not have had to arrive at this point.” A spokesman for Norwegian said they were pleased with the move to arbitration to solve this long-overdue issue.
“A final approval will lead to more new jobs on both sides of the Atlantic, more new transatlantic routes, and more affordable fares,” he said.
Niall MacCarthy, the managing director of Cork Airport, also welcomed arbitration.
“The continued US delay in awarding the licence to Norwegian has now gone beyond acceptable and we are pleased that the EU, with the full support of the Irish government, is now going to seek to push the button on arbitration to get this dispute finally resolved,” he said.
“We are hopeful that the US authorities will not draw this matter our further, once legal papers are served, and should award the long-overdue licence to NAI and avoid further damage to the Open Skies treaty and an inevitable defeat under arbitration.”
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