US set to revoke some European airlines' wet-lease authorisations

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US set to revoke some European airlines' wet-lease authorisations

• 22 February, 2019
• SOURCE: Flight Dashboard
• BY: Jon Hemmerdinger
• Boston

Citing competitive imbalance, the US Department of Transportation has restricted some European airlines from operating US-bound flights under so-called "wet lease" agreements.

Though the move's impact on flight operations remains unclear, the restrictions apply to more than a dozen European airlines, including Aer Lingus, Austrian Airlines, Lufthansa, TAP Air Portugal and Norwegian Air Shuttle.

Norwegian tells FlightGlobal the restrictions will not affect its operation because it ended wet lease flights in January. Other European airlines and industry groups Airlines for America and IATA did not immediately responded to requests for comment.

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"We have tentatively determined to limit EU-to-EU carrier wet-leases in the exact manner that US carriers face in wet-leasing to EU carriers," says the US Department of Transportation's 21 February tentative order. "We propose to take these actions due to the longstanding competitive disadvantage US carriers have faced."

The DOT's order revokes the authority of airlines from the European Union, Iceland, Norway and Switzerland to act as wet lessors to other European airlines. Wet lease agreements involve one carrier operating flights – and providing aircraft, crew and related operational services – to another airline.

The DOT's tentative order will terminate on 30 March European carriers' wet-lease authorisations that have been effective for more than 14 months.

Those authorisations include Aer Lingus' operation for ASL Airlines Ireland, Austrian's operation for Tyrolean Airways, Lufthansa's operation for Lufthansa CityLine and TAP's operation for both White Airways and Portugalia, the order says. Other affected wet lease agreements include those between Cargolux Italia and CargoLux Airlines, Eurowings and Express Deutschland, and Air Europa and Privilege Style, it says.

The DOT will also limit all other wet-lease authorisations to 14 months, meaning Norwegian's authorisation will expire on 26 May, the order says.

The DOT notes that in September 2008 the EU limited to 14 months authorities for non-EU airlines to engage in wet lease operators for EU airlines. The US had no such restrictions – a discrepancy US airlines claimed hindered their ability to compete for European wet-lease work.

The US government negotiated with the EU to modify wet-lease restrictions, even drafting an agreement with European regulators in 2017.

That document, however, remains unsigned amid "unreasonably excessive delays" by European governments, the DOT says.