The move marks a major escalation in the long- running dispute which is now facing the incoming Trump administration.
The European Commission’s delegation in Washington delivered a diplomatic note to the State Department in Washington on Wednesday formally invoking the arbitration process as provided for under the EU-US Open Skies deal.
The commission is in dispute with US authorities over their delay in granting a foreign carrier permit to Norwegian Air International (NAI), which wants to operate flights from Cork to Boston and New York.
NAI, an Irish subsidiary of low-fares giant Norwegian, applied to the US authorities almost three years ago for a permit.
But its application is facing stiff opposition from various US and EU labour unions and airlines which have claimed the airline is operating a flag of convenience model to skirt strict labour laws — a claim that the airline has repeatedly rejected.
The US department of transportation granted tentative approval for the permit in April, but a final decision is still awaited.
It is now the longest- pending permit application of its kind.
NAI and EU political leaders insist NAI’s application complies with the terms of the EU-US Open Skies deal, and that the US refusal to sanction the permit is in direct contravention of the 2007 deal.
The EU transport commissioner, Violeta Bulc, signalled in July that she would take the unprecedented step of triggering arbitration in the case in a bid to break the impasse.
The European Commission’s transport spokesperson, Anna-Kaisa Itkonen, confirmed last night that the formal process is now underway.
She said the commission works to ensure that EU-level aviation agreements are fully respected and that EU companies are not subject to unfair treatment.
The US authorities now have 20 days to name their arbitrator.
Under the arbitration process, a third arbitrator will also be appointed later, by mutual consent.
If the US is found to have breached the Open Skies agreement, the EU could suspend US airlines’ benefits under the 2007 agreement.