Everybody loves Ireland: race to the bottom

Control the costs - The Scandinavian airline SAS was quick to offer public justification already in January 2017 as to why it would be setting up a subsidiary in Ireland.

Less than a year later, the first flights under the Irish registration are already a reality. With this the company follows in the footsteps of other prominent “Irish” airlines, like Norwegian & CityJet: Irish registered companies with no bases in Ireland and crews mostly hired through agencies. Following their example SAS becomes complicit in establishing this “new business model” in European aviation, a model, which SAS had once fought hard against.
In the not so distant past SAS had warned governments and authorities that the airline will not be able to compete with letterbox companies, which outsource and hire cheap crews through brokers. In official correspondence to the US Department of Transportation, SAS repeatedly criticized Norwegian for establishing an Irish subsidiary under the false pretext of making use of the full EU traffic rights. "Norwegian Air International (NAI, Norway’s Irish subsidiary, ed.) will use its Irish address to utilize the more lenient Irish labor legislation." (source: Berlingske Business).
This has now become a model & trend among European airlines. And it is neither because of “Ireland’s long history with the industry”, as Bjorn Kjos (Norwegian’s CEO) is trying to convince us, nor because of the “number of highly competent people who are in Ireland and who have also been part of establishing new, effective models before”, as SAS’s Chief Executive wants us to believe. Ireland has low taxes, a flexible regulatory environment, lenient legislation and business-friendly oversight authorities that have been attractive for many companies within and beyond aviation.

SAS will now benefit from this competitive advantage. A look at the planned routes shows that the majority of flights on SAS’s Irish aircraft - based in Heathrow and Malaga - would operate to Scandinavia and from there to the rest of Europe. Management had pledged hiring pilots on industry-competitive terms & conditions. Unfortunately, reality has not lived up to the pledges and SAS Ireland is hiring through broker agencies at rock bottom conditions. The new set up is flawed and instigates social dumping.
The Irish AOC has now become officially a tool for cheap, flexible operations & social dumping – also called a ‘Flag of convenience’. And that’s why everybody loves Ireland.

Read about Norwegian’s use of Flags of Convenience


Publicerad 2018-05-31 av SPF