Tell Congress: Support Legislation to Address the Threats from Unfair Business Practices and Stop Flag-of-Convenience Airlines

Protect American Jobs

Some foreign airlines are unfairly attempting to get ahead in the global marketplace by using the flag-of-convenience business model to avoid their home countries’ employment, tax, labor, and safety requirements. These companies seek to do business in the United States with unfair competitive advantages that hurt U.S. airlines and their workers.

Under a flag-of-convenience business model, a foreign airline picks “convenient” countries that have less-stringent laws and regulations in which to base different pieces of its operations. This opportunity to “shop” for an advantageous regulatory and legal environment allows the airline to avoid its home country’s safety, tax, and labor structure. Flag-of-convenience and “atypical” business models facilitate these airlines’ practice to undermine workers’ pay, benefits, and work rules. In addition, the model risks eroding the proactive safety culture fostered by many countries’ regulations to the detriment of airline passengers and cargo shippers. In an atypical model, for example, an airline may use a third party to hire and manage employees—including pilots—as independent contractors, who then do not have a direct connection to the employer for safety-reporting protocols.

ALPA supports U.S. Open Skies policy aimed at creating a fair-market environment for the international airline industry, and we expect the U.S. government to enforce its stated policy goals, including maintaining labor standards and providing a fair and equal opportunity for American workers to compete. Foreign airlines’ atypical business models clearly run counter to these provisions. As a result, our union adamantly opposes airlines that employ the flag-of-convenience or other atypical business models operating into North America.

The U.S. airline industry employs more than 150,000 workers to support its international operations. U.S. airlines’ international operations contribute about $95 billion per year to the U.S. economy. Foreign flag-of-convenience airlines put these jobs and economic benefits at risk.

Unfortunately, we are seeing the growth of atypical employment models in which employers—through a variety of schemes—are seeking to dissolve their direct relationship with their pilots and cabin crew. These arrangements, which may include misclassifying pilots as self-employed or independent contractors, are meant to undermine the right to collectively bargain and otherwise dismantle the traditional employee-employer relationship related to safety, pay, benefits, and working conditions. In Europe alone, approximately 15 percent of all pilots are under atypical employment contracts in which the status of all components of their job—safety, retirement security, and collective bargaining—are subject to a tenuous and complicated patchwork of different countries’ laws.

The U.S. government must defend a fair and free marketplace for U.S. airlines and their employees. Permanently preventing unfair business models from taking root in the United States is critically important for American airline workers. We must take immediate steps to prevent the proliferation of job-killing business models.