Norwegian Air says planned long-haul services at risk

Norwegian Air Shuttle, which was given the green light to establish a subsidiary in Ireland earlier this year, has said its plan to introduce long-haul services from London risks being stymied by US opponents who claim they are undermining labour standards.

Norwegian Air made its first foray into long-haul flying in 2013 with routes from Scandinavia to the US and Thailand. Services from London to New York, Los Angeles and Fort Lauderdale, Florida, will start as planned next month, though the US Department of Transportation has yet to grant a foreign air carrier permit for the planned Irish subsidiary, chief executive Bjoern Kjos said.

The House of Representatives this week passed an amendment to the DOT budget aimed at blocking the application. That’s after the US Air Line Pilots Association said Norwegian was seeking to base jets in Ireland - though not fly from there -‘’expressly to evade the social laws of Norway in order to lower the wages and working conditions of its air crew.’

The Irish Aviation Authority and the Commission for Aviation Regulation recently licensed the Scandinavian low-cost carrier to operate an airline from the Republic.

The firm has chosen Dublin as the headquarters for its long-haul business in a move that sparked a row with Norway’s unions. They claim the airline is sidestepping labour-protection laws, but the company says it is here to take advantage of the EU Open Skies agreement and to access finance.

The firm intends that a number of its assets, including many of its aircraft, will be held in the Republic. It plans to double its fleet of 45 and is likely to finance much of that expansion through Irish-based aircraft lessors.

Mr Kjos said the American pilots it uses on trans-Atlantic flights are paid an above-average rate, and that many are joining from established network airlines. The carrier can add new flights ‘’under the same operation, with the same crew as we’re doing today’’ using its Norwegian air operator’s certificate if it has to do so in the short term, he said.

Norwegian Air is embarking on one of the industry's most ambitious growth plans as it rolls out long-haul flights while swelling an 88-plane European fleet with 222 mainly re-engined Boeing 737s and Airbus Group NV A320s arriving from 2016.

Mr Kjos's long-haul ambitions are built around the lower operating costs of the all-composite Boeing 787 Dreamliner model that he says will finally make low-cost services viable after decades of false-starts at carriers such as Laker Airways.

Norwegian Air has agreed to take eight 787-8s each seating 259 people in coach class and 32 in premium economy. Six have so far been delivered. It also has agreements for nine 787-9s that have a longer range and will carry 20 percent more people, which will take the 787 fleet to 17 aircraft by 2018.

In an April letter to Minister for Transport Leo Varadkar, Mr Kjos said talks with Boeing for a further 20 787-9s were frozen pending the DOT decision on the license application.

Bloomberg