WASHINGTON — Discount airline Norwegian Air Shuttle has won permission from U.S. federal authorities for its disputed plan to expand flights to the U.S., fuelling the long-simmering battle between legacy airlines and low-cost carriers for transatlantic business.
Norwegian Air Shuttle had fought for three years trying to secure permission for its Ireland-based subsidiary to expand transtlantic services.
The decision was a defeat for several large U.S. airlines and their labour unions, who argued that Norwegian was getting around Norway’s labour and tax laws by operating new flights with a subsidiary based in Ireland.
The Transportation Department said in a regulatory filing Friday that it approved a foreign air-carrier permit for the subsidiary, which is called Norwegian Air International.
Regulators said they consulted legal experts in the State Department and Justice Department and found no grounds to reject the application.
The decision upheld the Transportation Department’s preliminary approval of the permit in April.
Norwegian Air Shuttle already flies between Europe and the U.S. It said the new service by the Irish affiliate would benefit consumers with lower fares and create jobs at U.S. destinations.
The AFL-CIO said it will ask Congress to reverse Friday’s decision.