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The Wall Street Journal on the Norwegian Air Debate

By Admin

[As published By Doug Cameron in The Wall Street Journal]

Norwegian Air’s Fight for Expansion Intensifies

The battle over a European airline’s plan to expand flights to the U.S. intensified on Thursday as both sides in the debate highlighted safety issues ahead of a crucial meeting of regulators next week.

The yearlong effort by Norwegian Air Shuttle AS A to secure additional flying rights has become a touchstone for broader competition and oversight issues in the airline industry, with fierce lobbying from both sides to Congress.

Norwegian Air Chief Executive Bjørn Kjos used a speech in Washington, D.C., to pledge more service to the U.S. if the U.S. Transportation Department approves the company’s application, while critics repeated their calls for it to be refused.

Officials from the executive arm of the European Union, who back Norwegian Air’s application, are set to meet with their U.S. counterparts on Nov. 25 to discuss Norwegian’s request, which has been before the Transportation Department since February.

“Fear of competition is the reason for the controversy about our EU-licensed airline based in Ireland,” said Mr. Kjos.

A coalition of airlines and labor groups have campaigned against the plan, which would involve Norwegian Air using a stand-alone airline based in Ireland.

Opponents argue that Norwegian Air, which operates Europe’s third-largest low-cost airline, is trying to circumvent European labor laws by registering aircraft in Ireland, even though it wouldn’t fly from that country, and hiring employees at local bases in Europe, Asia and the U.S. rather than in Norway, where wage and benefit costs are higher.

“It would establish a very dangerous precedent,” said Ed Wytkind, president of the Transportation Trades Department, a U.S. labor group.

Mr. Wytkind and other union leaders questioned whether Norwegian Air’s Irish arm would have adequate safety oversight from regulators, a charge rebutted by Mr. Kjos.

Norwegian Air is the first of the new breed of low-cost airlines to launch flights to Asia and across the Atlantic from Scandinavia and a base in London, and has been using its existing licenses while seeking U.S. approval for the expansion plan.

Mr. Kjos said U.S. approval would allow Norwegian Air to examine using Boeing Co. 737 Max jets for intercontinental service between smaller cities and 787 Dreamliners for the first direct Europe-Hawaii flights, while the airline’s Stockholm hub could become an alternative to Persian Gulf carriers for passengers traveling between the U.S. and parts of Asia.

The Transportation Department has declined to comment while it reviews Norwegian Air’s application.

Rep. Frank LoBiondo (R., N.J.), chairman of the House aviation subcommittee, told reporters that a new Congress would act to block Norwegian Air if the department approved the application.