The U.S. government on Friday gave preliminary approval for plans by Norwegian Air Shuttle ASA to expand its trans-Atlantic flights in the face of fierce opposition from some airlines and labor groups.
The decision follows more than two years of fierce lobbying from both sides over plans by the Norwegian discount carrier to use an Ireland-based affiliate to operate long-haul flights from Europe to Asia and the Americas.
Norwegian Air’s move sharply divided the airline industry, and the extended review by U.S. regulators drew rebukes from the European Commission and some member states.
The European Union’s executive arm backed the plan despite misgivings among some countries and had threatened unspecified retaliation if the U.S. blocked the plan or continued to leave it in regulatory limbo.
The issue lost some its prominence as a group of U.S. and European airlines rounded on alleged subsidies provided to three Middle East carriers, but it has remained closely watched as a barometer of competition policy in the industry.
If the U.S. Department of Transportation’s decision to give preliminary approval for the application from Dublin-based Norwegian Air International becomes final, it would allow it in future to expand international flying to countries not covered by Norway’s existing aviation agreements. It already flies to cities in Asia and the U.S. from Scandinavia and London with rights granted to Norway.
The Transportation Department in August 2014 deferred a final decision, citing the huge volume of comments on the plan and its unique nature. It typically takes only a few months to decide on such applications.
Opponents have until May 6 to file any objections, which the department will consider before making the approval final.
Norwegian Air has said the Ireland base and the use of staff contracted through Asian entities give it more strategic flexibility to launch future international routes and cut labor and finance costs.
Critics including Delta Air Lines Inc., pan-Scandinavian carrier SAS AB and unions on both sides of the Atlantic fiercely opposed the plan, which they said was designed to circumvent European labor laws by registering planes in Ireland even though the carrier wouldn’t fly from there. Opponents argued it opened the door to maritime-style flags of convenience in the aviation industry that could undermine safety standards.
Norwegian Air rejected the accusations but sought to defuse criticism by pledging to hire only U.S. and European nationals for trans-Atlantic flights, and transferring staff from temporary contracts to the parent company after an extended probation period. Critics said the pledge didn’t alter their main charge that Norwegian Air International would contravene international aviation agreements, notably the 2007 open-skies deal between the U.S. and the EU.
The European Union previously approved the application and has demanded the U.S. follow under the terms of the open-skies accord that lifted most of the barriers on trans-Atlantic flying.
The Wall Street Journal
US DOT gives Norwegian Air Shuttle green light
