The U.S. House of Representatives Transportation and Infrastructure Committee just voted to raise your airfare by making foreign competition more difficult.
The provision allows the secretary of transportation to block foreign airlines from serving the U.S. after finding a carrier would erode labor standards because it was established in a country other than its majority owners to avoid regulations of the home country.
What does that mean exactly? The USA will block a “race to the bottom” using cheap foreign labor to drive down prices.
On one side: bipartisan concern over the practices of Norwegian Air, a Norwegian company doing business in Ireland and using crews from Singapore.
On the other side: acknowledgement that low-cost carriers like Norwegian have spent billions of dollars on Boeing jets, hired hundreds of American workers, and made airfare affordable for thousands of Americans.
Why I am Skeptical of the “Race to the Bottom” Argument
I think Norwegian spokesman Anders Lindstrom captures nicely why I am skeptical of protectionist moves like the House bill in question.
At a time when U.S. airline job growth continues to rise and U.S. carriers are generating record profits, the language appears to be yet another attempt by special interests to evade healthy competition and raise costly procedural hurdles to new entrants in international markets — all to the detriment of consumers, communities, aerospace manufacturers, and the travel and tourism sector
Shouldn’t it count for something that despite a huge crop of low-cost-cariers blossoming around the globe, U.S. airlines are reporting record profits? U.S. carriers are expanding as well…
Isn’t that the real reason why U.S. carriers also oppose Gulf Carriers? Not so much because they are hindering profit, but because they seek an even higher profit by forcing competition out? Let’s not kid ourselves: that higher profit comes with less consumer choice and higher consumer prices.
Norwegian Air is providing high-paying manufacturing jobs in the USA, making airfare cheaper for you and me, and providing SE Asian workers a path to middle class life.
Closing off this sort of competition due to dubious labor concerns expressed by well-funded and vested interests strikes me as something all Americans who do not work for American, Delta, or United should oppose.