U.S. denies discount carrier Norwegian Air's bid for early entry

NEW YORK, Sept 2 Tue Sep 2, 2014 7:26pm EDT

NEW YORK, Sept 2 (Reuters) - U.S. regulators slowed discount carrier Norwegian Air International Ltd's quest to operate in the United States on Tuesday, drawing cheers from unions who said the airline pays low wages and does not meet U.S. employment standards.

The Department of Transportation rejected the airline's December 2013 request for an exemption that would have expedited its entry into the U.S. market, saying "the novel and complex nature of this case (does not make an exemption) appropriate or in the public interest."

Regulators now will undergo an exhaustive review to determine whether Norwegian Air International may fly to the United States, the Department of Transportation said.

Norwegian Air International is a unit of Norwegian Air Shuttle ASA incorporated in Ireland.

Norwegian Air Shuttle, based in Fornebu, Norway, already flies to the United States from Europe, and those operations are not affected by the decision Tuesday, the airline said in a statement. The company's niche is offering low-cost international travel using Boeing Co 787 Dreamliners.

The company's effort to get a U.S. foreign carrier permit for its Irish subsidiary has garnered support from the European Commission and the government of Ireland, Norwegian said.

But opponents include Delta Air Lines Inc, American Airlines Group, United Continental Holdings Ltd and other U.S. carriers, the Association of Flight Attendants, the Transportation Trades Department AFL-CIO and the International Association of Machinists and Aerospace Workers.

"The U.S. Department of Transportation took an important stand for fair competition today," Air Line Pilots Association Lee Moak said in a statement.

He added, "the DOT's work is not yet complete in making certain that (the airline) is not permitted to exploit international aviation policy and law to gain an unfair economic advantage over U.S. airlines."

Norwegian Air International Chief Executive Asgeir Nyseth said in a statement that the airline "stands behind its business" and "looks forward to receiving approval to operate without further delay." (Reporting by Jeffrey Dastin in New York and Ros Krasny in Washington; Editing by Alwyn Scott, Bernard Orr)

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