Norwegian’s plans to build an international long-haul airline based in Ireland may be scrapped if it fails to gain backing from the US Department of Transportation (DOT).
The carrier launched flights to the US and Bangkok from its Nordic base last year, and in February gained an operating licence, enabling it to host the business in the EU, where it can operate under more favourable conditions and take advantage of the Open Skies trade agreement with the US.
The airline is currently operating under a temporary licence and is awaiting a decision from the DOT for a permanent licence.
The application for a permanent licence has been fiercely contested by some parts of the industry. They claim the main reason for the move is to bypass Norway’s strict labour laws, avoiding high labour costs and enabling it to employ cheaper Thai workers.
Norwegian denies this claim and said the move is to gain access to future traffic rights to and from the EU.
Bjoern Kjos, Norwegian’s chief executive, said: “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.”
Kjos also confirmed the delay in gaining the permanent licence has led to it suspending talks to purchase 20 Dreamliner planes from Boeing.
He said: “”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.”
Earlier this year, Norwegian ordered four more B787-9s despite issues with its Dreamliner fleet (see news, February 13).