U.S. Faces EU Legal Action Over Norwegian Air’s Irish Subsidiary

Boeing_737-8JP_Norwegian_Air_Shuttle_AN2062008-635x357The European Union took unprecedented legal action against the U.S. in a bid to enable Norwegian Air Shuttle ASA to serve American destinations from Ireland.

The European Commission, the EU’s executive arm, triggered arbitration this week aimed at ensuring Norwegian Air Shuttle’s Irish subsidiary can fly trans-Atlantic routes. The step, taken under a dispute-settlement clause in the EU-U.S. “open-skies” agreement, is meant to push the Department of Transportation in Washington to give final approval to the Irish unit’s December 2013 application for a foreign-carrier permit.

In April, U.S. transport regulators gave a tentative nod to the application over the objections of domestic airlines and labor unions. Following a public consultation on the preliminary green light, the U.S. has yet to give its definitive approval, according to the commission.

“It’s unclear if and when the Department of Transportation will take the final decision,” Anna-Kaisa Itkonen, a commission spokeswoman, said on Thursday in Brussels. “Therefore, after consulting the EU member states, we decided to seek a resolution by legal means.”

The U.S. government’s hesitation over the application by Norwegian Air Shuttle’s Irish arm, which wants to connect Cork and Boston, has slowed what is among the industry’s most ambitious expansion plans. The Fornebu, Norway-based discount carrier began as a domestic operator in 1993, added bases elsewhere in Europe beginning in 2006 and started offering long-haul services in 2013.

The trans-Atlantic open-skies accord, which took effect in 2008, allows airlines based in the EU to serve U.S. destinations from any member nation rather than from just their home country. While Norway isn’t a member of the EU, Ireland belongs to the 28-nation bloc.

The arbitration process initiated by the commission will start before year-end and probably last several months, according to Itkonen.