Wednesday, November 19, 2014

Norwegian Air CEO rejects criticism of plan for U.S. budget airline

(Reuters) - The chief executive of Norwegian Air Shuttle rejected arguments by U.S. airlines and unions that his efforts to build a low-cost, long-haul airline serving the United States would undermine U.S. wages and working standards.

Instead, CEO Bjorn Kjos said U.S. airlines arguing for labor fairness actually fear his cheap ticket prices. A round-trip flight from New York to London in December costs as little as $483 on Norwegian, compared with $835 on Delta or $832 on American, according to prices posted on the airlines' websites on Wednesday.

Kjos, a former fighter pilot, said in an interview with Reuters on Wednesday that his airline pays competitive wages everywhere its crews are based, including New York, and that he supports employees' right to form unions.

"We don't care if they're unionized," he said. "That is up to the crew to decide themselves."

The comments came as dozens of pilots visited Capitol Hill on Wednesday to press lawmakers to oppose Norwegian's efforts to get broader permission to fly to the United States. Kjos is slated to speak to International Aviation Club in Washington on Thursday.

While Norwegian Air Shuttle already flies from Oslo to New York, Florida and other destinations, its Ireland-based subsidiary, Norwegian Air International, does not have permission to fly to the country.

U.S. airlines and labor unions are lobbying the U.S. Department of Transportation to deny the subsidiary's application for a foreign air carrier permit.

The opponents include airline labor unions and big carriers such as American Airlines Group, Delta Air Lines Inc and United Continental Holdings Inc.

They say Norwegian will dodge U.S. labor laws by using its Irish subsidiary to take advantage of labor laws that are weaker than in Norway, threatening U.S. jobs.

Kjos said the Irish subsidiary is necessary to obtain access for all of Norwegian's aircraft to fly between the United States, Europe and Asia. If the company is only incorporated in Norway, it does not have access to many countries in Asia, since Norway is not part of the European Union. That would leave Norwegian running two airlines that separately serve the United States and Asia, and not able to shift aircraft from one region to the other.

"It would be a logistical nightmare," Kjos said. "We can't have one airline flying east, one airline flying west."

If the Transportation Department approves Norwegian's application, Kjos said, he plans to establish crew bases in Los Angeles, New York and other locations, and likely will hire American pilots.

Norwegian is one of the first airlines trying to bring low-cost flying to long-haul flights. It has a fleet of 17 Boeing 787 Dreamliners and plans to order at least five to 10 more.

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