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Feds' Regulatory Delay Supports High-Fare Trans-Atlantic Airline Oligopoly



(p. B1) In the past three years, Norwegian, one of Europe's biggest low-cost airlines, has quietly established a beachhead in the trans-Atlantic market by offering low-fare, no-frills service on long-haul flights.

Thanks to a small but expanding fleet of fuel-efficient planes combined with deeply discounted ticket prices, Norwegian Air Shuttle has attracted a growing number of leisure travelers looking for cheap flights.

It is all part of the vision of Norwegian's outspoken chief executive, Bjorn Kjos, who is determined to force the same kind of low-fare competition on international routes that has been so successful in domestic markets for airlines like Southwest and Spirit, and Ryanair in Europe.


. . .


But Norwegian's expansion has been stymied by vigorous opposition. Legacy airlines on both sides of the Atlantic see a low-cost competitor on their cash-cow routes as a major threat to their long-term profitability. Labor unions object to Norwegian's plans to hire flight crew from Thailand, a practice they have repeatedly described as "labor dumping."

The airline has also faced lengthy delays in receiving regulatory approvals in the United States.


. . .


(p. B4) A spokeswoman for the Transportation Department did not give any reasons for the delays that have left Norwegian in bureaucratic limbo in the United States. The airline's first request was filed more than two years ago. . . .

The long delay in approving the application "does not reflect well on the political independence of the Department of Transportation with respect to the free trade principles behind the E.U.-U.S. open skies agreement," according to a report by analysts at the CAPA Center for Aviation. "The calculated inaction only serves to restrict competition and to deny consumer choice."


. . .


"There is still a lot to do," Mr. Kjos said. "We have to think about how to fly more people more cheaply. There are hundreds of millions of people that don't have access to cheap flights."



For the full story, see:

JAD MOUAWAD. "Norwegian Air Flies in the Face of the Trans-Atlantic Establishment." The New York Times (Tues., FEB. 23, 2016): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the story has the date FEB. 22, 2016.)






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