BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. ) Application of ) ) NORWEGIAN AIR INTERNATIONAL LIMITED ) ) Docket No. OST-2013-0204 for an exemption under 49 U.S.C. 40109 and ) a foreign air carrier permit pursuant to ) 49 U.S.C. 41301 (U.S.-EU Open Skies) ) ) Reply of the Irish Aviation Authority to Objections to Order to Show Cause In comments submitted to the docket on 12 May, 2016, the Irish Aviation Authority (IAA) provided a detailed statement in support of the application of Norwegian Air International (NAI) for a foreign air carrier permit. In this Reply, the IAA will take the opportunity now to repeat some of key points in our filing and will rebut several highly inaccurate and misleading allegations in the Objections of: (1) the Southwest Airlines Pilots Association (SWAPA) related to the safety of NAI; and (2) the various labour unions (including the Labour Parties, the Allied Pilots Association, and the "Social Partners (Sectoral Social Dialogue Committee Civil Aviation Air Crew Working Group), hereinafter the Unions ) pertaining to the meaning and application of Article 17 bis of the Open Skies Air Transport Agreement between the United States and the European Union and its Member States (hereinafter the Open Skies Agreement ); and (3) the Irish Air Line Pilots Association (IALPA). 1. SWAPA s False Assertions Regarding Safety A number of objections filed by SWAPA are false and highly misleading. With no corroboration and a flagrant disregard for the facts, SWAPA attacks the safety of NAI and Irish regulatory oversight, ignoring the determination of the U.S. Federal Aviation Administration contained in the Department s Order to Show Cause 1 (hereinafter the Order ) that there is no basis related to aviation safety for disapproving NAI s application. Irish aviation safety and oversight satisfies Federal Aviation Administration (FAA) and ICAO standards. 2 SWAPA s claim that NAI s labour standards will comprise the safety and economic security of its workers is highly irresponsible and harmful to the integrity of international aviation. 1 Order 2016-4-12. 2 Id. at 7. Page 1 of 6

NAI is an Irish domiciled business entity and is a subsidiary within the Norwegian Air Group. Most importantly from our perspective, the accountable post-holders of NAI are based in Ireland, with a significant number of staff based at its Irish office at Dublin Airport. The IAA will not support the continued provision of an Air Operator Certificate to any Air Operator unless this crucial safety requirement is fully adhered to. As is the case with every Irish airline, NAI is subject to rigorous safety oversight in accordance with European regulations. The IAA surveillance of NAI has continued unabated throughout its existence and includes flight line checks, base checks and aircraft technical checks at all locations in its network, as well as all of the normal compliance and continued certification checks without issue. The IAA conducts safety oversight to the highest international standards and this is duly recognised by independent authorities including the International Civil Aviation Organisation (ICAO), the European Aviation Safety Agency (EASA), as well as the United States Federal Aviation Administration s International Aviation Safety Assessment Programme, which confirms Ireland as a Category 1 State. SWAPA s assertion that there is a safety issue is completely false and SWAPA has no place in making such damaging statements. The IAA is the legal entity under ICAO responsible for ensuring that NAI complies in full with all international safety requirements and the IAA can confirm that the safety performance of this airline has been deemed entirely satisfactory and that there is no credible safety concern that should exclude it from any market or route. There is no flag of convenience. 2. Interpretation of Article 17 bis by the Parties to the Open Skies Agreement In its Order to Show Cause, it appears abundantly clear to the IAA that the United States Department of Transportation has correctly interpreted the meaning of Article 17 bis based on decisive legal analysis guided by accepted norms of treaty interpretation. Bolstering that analysis were careful and detailed formal legal opinions of the Department s General Counsel, the Legal Adviser of the Department of State, and the Office of Legal Counsel of the Department of Justice. The Government of the United States which is a Party to the Open Skies Agreement has thus spoken clearly and authoritatively: Article 17 bis does not provide an independent basis upon which the United States may deny a permit to an airline of a Party to the Agreement if that airline is otherwise qualified to receive such a permit. The European Commission which led the negotiation of the Open Skies Agreement on behalf of itself and the EU Member States has also spoken clearly and authoritatively. The DOT notice regarding the meeting held in Brussels on 14 July, 2014, summarised the Commission s views: Page 2 of 6

Article 17 bis does not provide a legal basis for unilaterally denying an application under Article 4 because: (a) Article 4 makes no reference to Article 17 bis, and (b) Article 17 bis itself does not formulate a legal rule that can be applied unilaterally by one party. 3 The representatives of the two Parties to the Open Skies Agreement are thus in full agreement on the interpretation and application of Article 17 bis. For its part as a Member State of the European Union, Ireland emphatically endorses this view. Union representatives, together with other stakeholder associations representing airlines and airports, attended the negotiating sessions that resulted in the Open Skies Agreement as observers, not as negotiators. Unlike the United States and the European Union and its Member States, the Unions are not Parties to the Agreement and their views as to the interpretation and application of the Agreement have little weight. Indeed, no weight should now be given to the views of the Unions where, as in the instant regulatory proceeding, they have already made such views known in voluminous and repetitive filings over a period exceeding two years and those views have now been affirmatively and unconditionally rejected by the Parties to the Agreement. The Unions submissions add little substance to the already extensive record in this proceeding as to the interpretation and application of Article 17 bis. As convincingly shown in the legal opinions of the Department s General Counsel, the Legal Adviser of the Department of State, and the Office of Legal Counsel of the Department of Justice, the language of that article is hortatory, plain and simple. The absence of any reference to Article 17 bis in the requirements for Authorisation in Article 4 makes this clear. The arguments advanced by the Unions in the past and again in their latest filings do nothing to alter this conclusion. The outcome that the Unions seek and the outcome their misguided interpretation of Article 17 bis aims to achieve is as implausible politically as it is legally indefensible. Were the Unions view to prevail, Article 17 bis would empower the United States, in its absolute discretion and over the objections of the European Union, to reject an application by an EU airline that meets the requirements for Authorisation in Article 4. 3. United States Legal View on Article 17 bis Based on the Department s Order, the formal legal opinions contained therein and in the docket, and the authoritative conclusions of the European Commission cited above, the intentions and subsequent practices of the parties to the Open Skies Agreement as to the meaning and intent of Article 17 bis are clear and conclusive. Moreover, each of the legal opinions has similarly concluded that the text of the Open Skies Agreement is so unambiguous that it is unnecessary to resort to interpretation of the Agreement s negotiating history: 3 Department of Transportation, Notice at 2, Docket DOT-OST-2013-0204 (4 Aug., 2014). Page 3 of 6

The Department s General Counsel: When the language of an agreement is as unambiguous as it is here, the negotiating history is irrelevant. 4 The Office of Legal Counsel of the Department of Justice: Because we conclude that the text of the Agreement is clear, and consistent with the central purpose of the Agreement, we need not inquire into the negotiating history. 5 Legal Adviser of the Department of State: The Department is of the view that the terms of the Agreement are unambiguous and that recourse to supplementary means of interpretation is therefore unnecessary. Notwithstanding this conclusion, the Department, which led the U.S. delegation that negotiated the Agreement, believes that the negotiating history of the treaty confirms the conclusion that Article 17 bis does not constitute a basis for a Party to unilaterally deny a permit to an otherwise qualified carrier of another Party. 6 4. Overwhelming Support for NAI from Ireland There is an overwhelming level of support for NAI from Ireland across all levels. Thousands of Irish citizens have voiced their support on the docket, as well as many businesses and representative organisations and Government agencies. On the 11 May, a letter was issued to over 50 members of the Friends of Ireland Caucus from a group representing the Irish community, which laid out the facts about NAI in order to correct the false, misleading and inaccurate information being used by the labour groupings for scare mongering purposes. The IAA was a signature to this important letter and asked that recipients not to be swayed by misinformation and false facts. The letter concludes by stating; Air transport connectivity between the United States and Ireland is a key component to vibrant economic development between our two great Nations. In the case of NAI s brand new Cork-Boston route, the ultimate beneficiaries of this air access will be the Irish and US citizens in those regions as well as the wider economy. We, the undersigned, strongly support DOT s tentative approval of NAI s application and look forward to full approval in the near future. We ask that you support NAI s request on behalf of the hundreds of thousands of American and Irish consumers and business people who will benefit from new, accessible, and affordable flights between our two countries and Europe. [Please see a copy of the letter under Annex A] 4 Order at 50. 5 Office of Legal Counsel, Interpretation of Article 17 Bis of the US-EU Air Transport Agreement at 10. 6 Order at 57. Page 4 of 6

We also note the objection of the Irish Air Line Pilots Association (IALPA) which we deem to be completely irrelevant and indeed we would constitute their submission to be anti-consumer. The IAA is aware that close to 90 Irish entities (Government leadership and agencies, trade organisations, businesses, Chambers, Councils, public representatives, airlines, hotels, airports, etc.) have formally offered their full support to the IAA, either on the docket or through media statements. Only two Irish entities have raised objections to NAI. [Please see the list of Irish NAI supporters and opponents under Annex B] In Conclusion: Ireland is strongly in favour of NAI. NAI has committed to operate direct services between Ireland and the US and NAI has ringfenced its crewing to European and US citizens for all transatlantic operations. NAI approval will generate more routes between Europe and the USA, leading to increased consumer choice and benefitting both economies. Based on the above dismissal of the Unions various arguments and for the reasons documented in our previous filing, the IAA respectfully asks that the Department issue a final approval as swiftly as possible so that consumers and businesses can realise the many public benefits from NAI s proposed service. There is no flag of convenience. Respectfully Submitted. Eamonn Brennan Chief Executive Irish Aviation Authority Page 5 of 6

CERTIFICATE OF SERVICE The undersigned certifies that, on 23 May, 2016, a true and correct copy of the foregoing Reply of the Irish Aviation Authority to Objections to Order to Show Cause was served by electronic mail on the individuals identified below: dan.weiss@united.com chris.walker@delta.com mlbenge@zsrlaw.com rpommer@atlasair.com russell.bailey@alpa.org jonathan.cohen@alpa.org edw@ttd.org clytle@portoakland.com kgeorge@broward.org mrichardson@swapa.org robert.wirick@aa.com francis.heil@aa.com howard.kass@aa.com info@airlineinfo.com jesse.elliot@faa.gov nicholas.tsokris@faa.gov john.chen@faa.gov john.allen@faa.gov anita.mosner@hklaw.com jennifer.nowak@hklaw.com nssparks@fedex.com gbleopard@fedex.com dberg@airlines.org jcasey@airlines.org kglatz@airlines.org cc@eurocockpit.be ejames@jamhoff.com EngleTS@state.gov sshur@traveltech.org eugene.alford@trade.gov David.Batchelor@sesarju.eu Ottar.Ostnes@sd.dep.no John.Hanlon@ELFAA.com Robert.Finamore@dot.gov Brian.Hedberg@dot.gov Charles.Leocha@travelersunited.org keith@washingtonairports.com pruden@asta.org rdow@ustravel.org /s/ rita.aldwell@iaa.ie Eamonn Brennan Page 6 of 6