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EU files for arbitration in U.S. dispute over Norwegian Air
December 1, 2016 / 4:30 PM / a year ago

EU files for arbitration in U.S. dispute over Norwegian Air

BRUSSELS, Dec 1 (Reuters) - The European Commission has accused the United States of breaching an air transport services pact and has formally filed for arbitration in a dispute over a request by a Norwegian budget carrier for flight routes.

Budget carrier Norwegian Air Shuttle wants to fly to the United States using an Irish unit to give it more flexibility and open up new routes under the EU-U.S. Open Skies agreement.

Transatlantic routes have proven lucrative for established airlines but now smaller carriers such as Norwegian and Iceland’s Wow Air are offering no-frills flights.

Norwegian’s application for Ireland-based Norwegian Air International to operate flights, made three years ago in December 2013, has met opposition from labour unions and some U.S. airlines and has so far not been approved.

Despite the U.S. Department of Transportation provisionally approving Norwegian’s request in April, there has still been no final decision.

“The Commission and the EU Member States share the view that the failure of the U.S. authorities to act on this request made in 2013 constitutes a breach of the EU-U.S. Air Transport Agreement,” a spokeswoman for the Commission said in a statement.

A spokesman for Norwegian Air Shuttle said it was confident arbitration would recognise the Irish unit’s right to the permit. “We welcome steps by the European Commission to solve this long overdue issue,” he said.

Reuters reported in July that the Commission planned to launch arbitration.

The Commission has named its arbitrator and the U.S. authorities now have 20 days to designate theirs.

A spokesman for the U.S. DOT declined to comment. (Reporting by Foo Yun Chee; Additional reporting by David Shepardson in Washington DC; Writing by Victoria Bryan; Editing by Ruth Pitchford)

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