US blocks Norwegian's bid to break into long-haul

The US House of Representatives has blocked Norwegian Air Shuttle’s low-cost international subsidiary from launching services between London Gatwick and the US in July.

Norwegian Air International (NAI) plans to offer cheap tickets on long-haul flights between Europe and US destinations, such as New York, Los Angeles and Orlando.

However, the US has approved legislation that would prevent it from doing so, arguing that the carrier would break international labour laws. It says NAI’s operating model violates the Open Skies agreement as it allows unfair competition.

In a statement US congressman Peter DeFazio explained that the ruling would “help protect American jobs from unfair competition by NAI, which plans to register its aircraft in Ireland — a country with less stringent labour laws and regulation — and outsource pilots and crew to countries with a cheaper, less experienced workforce, which will undermine safety”.

The airline argues that it meets all the legal requirements under the Open Skies agreement, and that the US’s rebuttal therefore breaks international agreements to allow open travel between countries.

NAI can register its aircraft in Ireland because it has an Irish operating licence. It has been waiting for an American operator’s license since February.

In a statement following the lawmakers’ decision, NAI said: “As a licensed carrier of the European Union, Norwegian meets all the legal, safety and operational requirements to serve the United States – and we fully intend to do so in the near future.”

The airline added that it was “disappointed” with the legislation. “As with anything new and innovative, Norwegian expected opposition from entrenched interests, and we will continue undeterred in the pursuit of our goal of serving the US.”

The airline’s business model has allowed it to offer extremely low long-haul fares, so low that other airlines are understandably concerned.

But is it fair to penalise an airline savvy enough to benefit from legal loopholes? Since the birth of low-cost carriers, the onus has been to cut costs.

Those to do so have enjoyed greater passenger numbers and higher returns. Surely, NAI is just finding new ways to beat the pack. The industry is Darwinian; airlines must adapt or die.

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