Good news for the UK, not so good for Norwegian UK or Vueling

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By admin July 5, 2016 10:50

Good news for the UK, not so good for Norwegian UK or Vueling

The US Department of Transportation (DOT) has confirmed that it has denied Norwegian UK exemption authority while putting on hold its application for a Foreign Air Carrier Permit (FACP).

The DOT statement said additional time is required to study opposition arguments from the Air Line Pilots Association (ALPA); the Transportation Trades Department AFL-CIO (TTD); the Association of Flight Attendants-CWA (AFA); the Transport Workers Union of America AFL-CIO (TWU); the International Association of Machinists and Aerospace Workers (IAM); and the European Cockpit Association (ECA).

The US opposition has cited clause 49 U.S.C. § 41302 of the US-EU Air Transport Agreement and the breach of the same by Norwegian if it uses cabin crews sourced from Asian employment agencies and based in the Far East.

Norwegian has accepted the DOT’s decision to look more closely at Norwegian UK’s application but in a statement the airline said it “remains confident it will eventually prevail” as it did with the Dublin-based subsidiary.

Meanwhile, there are even more serious goings on at Vueling today after the management of the airline was summoned to an emergency meeting in Madrid where they would be expected to deliver “explanations and immediate corrective measures,” to the Spanish Transport Ministry over the recent Europe-wide cancellations and delays at the airline.

Some 33 flights were cancelled by Vueling over the weekend allegedly without any reason being given and passengers at Barcelona airport were faced with delays of up to four hours, joining them were passengers at London Gatwick and other locations.

Vueling, a subsidiary of International Consolidated Airlines Group (IAG) and its main profit driver in recent years, has been experiencing problems for weeks as the summer rush gets going.

Because no reason has been given for the delays and cancellations, many in the industry are wondering if the Vueling schedule is just too tightly packed as the airline tries to maintain and improve utilization of aircraft, leaving it prone to severe delays if a technical fault or weather delay (not to mention the myriad of other potential delay reasons) strands an aircraft at the beginning of the day. It may be that Vueling needs to acquire additional aircraft at speed to maintain its summer schedule or cut it back. As at time of writing Vueling had given no response to requests to find out what is causing the problems. If Vueling cannot sort out whatever is going wrong then it will lose a great deal of summer rush income over the coming two busiest weeks of the year for the airline and as such IAG will suffer a dent.

In other news, the UK is planning to move to protect the City of London against all-comers. The current UK Chancellor of the Exchequer, George Osbourne, has confirmed that corporate tax rates will be falling under new proposals to below 15%. It is generally the case that if a government lowers corporation tax then receipts actually increase, this is the hope for the UK in the near future, and it is hoped helps to retain large banking institutions in London in the event of Brexit. Given the lower rates of VAT in the UK compared to most of the Eurozone, London could start to look even more attractive to many companies. All the while Brexit should have put the brakes on any interest rate rises by the US Federal Reserve, the Bank of England and the ECB and as such 2016 is looking brighter.

admin
By admin July 5, 2016 10:50