Wednesday 17 January 2018

Norwegian Air may halt Irish plans after delay in approval for US service rights

CEO of Norwegian Air Shuttle, Bjoern Kjos
CEO of Norwegian Air Shuttle, Bjoern Kjos

Joachim Dagenborg and Terje Solsvik

BUDGET airline Norwegian Air may reconsider plans to locate its long-haul operations in Ireland, giving up the advantage of having a European Union-based carrier, chief executive Bjoern Kjos told Transport Minister Leo Varadkar in a letter dated April 23.

If the airline left Ireland, where its long-haul planes are registered, it would rebase them in Norway, where it has a permit to operate, Mr Kjos said.

Norwegian Air has suspended talks on buying 20 Dreamliner planes from Boeing because of a delay in receiving US backing for its long-haul plans, Mr Kjos said in a letter.

Norwegian Air launched flights to the US and Bangkok from its Nordic bases last year and obtained an Irish air operators' certificate, hoping to base the business in the EU, where it can operate under more favourable conditions and take advantage of the Open Skies trade with the US.

Norwegian Air is operating its flights to the US under a temporary permit issued by the government in Oslo.

Its application to the US Department of Transportation for a permanent licence, made via Norwegian's Irish affiliate, has been fiercely contested by its rivals and by unions.

They argue that Norwegian Air is simply trying to escape high Nordic labour costs and wants to employ cheap Thai crew, gaining an unfair advantage.

Negotiations

"Unfortunately, the delay in the DOT process has given us no other choice than to put our ongoing negotiations with Boeing to purchase 20 new 787-9 Dreamliner aircraft – due to be registered in Ireland – on hold until Norwegian Air International's future in the US has been decided," Mr Kjos said in the letter seen by Reuters yesterday.

"An additional delay – or in the worst case, a negative decision by the US DOT – may regrettably force us to reverse our commitment to build an international long-haul airline in Ireland."

Norwegian has been expanding at breakneck pace in recent years and has more than 200 aircraft on order.

It is opening bases across Europe and plans to take on one of the most competitive markets this summer, launching long-haul flights between London and New York.

Irish Independent

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