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Deals

Norwegian Air vows to double Dreamliners if U.S. OKs subsidiary

(Reuters) - Norwegian Air Shuttle ASA NWC.OL will buy at least 17 Boeing Co BA.N Dreamliners to double its long-haul fleet as soon as U.S. regulators approve flights on its Irish subsidiary, Chief Executive Officer Bjoern Kjos said in an interview Wednesday.

A view of parked aircrafts belonging to budget carrier Norwegian at Stockholm Arlanda Airport March 5, 2015. REUTERS/Johan Nilsson/TT News Agency

If Norwegian does not get approval for U.S. flights by its subsidiary, it would scrap its Dreamliner order and increase the number of U.S. flights on the parent company’s existing Dreamliners, Kjos said.

A larger fleet of 787 aircraft would allow Norwegian’s Irish subsidiary to expand its route map to South America, South Asia and South Africa, Kjos said. However, the carrier first needs approval from the U.S. Department of Transportation so planes can land in the United States and move about the globe from there.

Norwegian has waited more than a year for the green light, slowed by opposition from U.S. airlines and unions that allege the subsidiary would undermine wages and working standards. The airline revealed in April 2014 that it had called off talks with Boeing to buy Dreamliners because of this.

Kjos said the airline expects U.S. backing eventually and has not looked into taking legal action because of the delay. He has dismissed claims about labor unfairness, noting that Norwegian has a crew base in New York and is unconcerned if its workers unionize.

Rather, he says U.S. airlines fear Norwegian’s low fares and vowed to ramp up flights if its application is blocked. Norwegian flies to the United States currently under a unit separate from its Irish subsidiary.

“If we don’t get (approval), we’ll fly everything into the U.S. It works exactly the opposite for our competitors,” he said.

Rather than buying more Dreamliners, Norwegian would use the eight in its fleet and nine others already on order to add daily departures to the United States along with new destinations, Kjos said.

Kjos said U.S. flights across the Atlantic are high-priced, suggesting Norwegian could lower fares.

The fall of the Euro and Norwegian crown against the dollar has made Norwegian’s labor costs relatively lower than those of U.S. airlines, as it employs more European employees, he said.

“It’s easy to compete,” Kjos said.

Reporting By Jeffrey Dastin in New York; Editing by Andrew Hay

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