JetBlue urges speedy resolution to Norwegian Air's U.S. dispute

(Adds EU official comment)

OSLO, Oct (Shenzhen: 000069.SZ - news) 20 (Reuters) - U.S. airline JetBlue Airways Corp. urged the U.S. government to resolve a dispute over Norwegian Air Shuttle (LSE: 0FGH.L - news) 's bid to increase flights to the United States, raising concerns that its own potential European expansion might be curbed as a result.

The U.S. Department of Transportation (DOT) provisionally approved budget carrier Norwegian's application to start flights through its Irish subsidiary in April, but has not given final approval. The typically routine request was filed more than two years ago.

In an Oct. 19 letter to the DOT seen by Reuters, JetBlue says it takes no position on the merits of Norwegian's application, but was concerned by what the delay means for carriers that wish to gain access to new markets, highlighting plans by the European Union to seek arbitration.

"As an airline which may one day seek authorisation from the aviation authorities of European Union member states for new transatlantic services, I am concerned that JetBlue might face similar treatment and delays in the future," James Hnat, JetBlue's general counsel, wrote.

In addition to its U.S. flights, New York-based JetBlue flies to Latin America and the Caribbean.

The budget airline has also expressed interest in new, long-range jets with a single aisle so it could fly profitably to cities in Western Europe that either have too much flight supply or can't draw enough customers to fill wide-body planes.

Norwegian's application has provoked criticism from U.S. competitors and trade unions, which argue that giving a licence to Norwegian's Irish subsidiary could undermine jobs, wages and working standards.

Norwegian CEO Bjoern Kjos earlier on Thursday said the process had largely been put on hold because of the upcoming U.S. presidential election.

The carrier currently flies to the United States on its Norwegian operating licence but wants the flexibility offered by the U.S.-EU Open Skies deal.

Already, the escalating fare war over the Atlantic (Shanghai: 600558.SS - news) is forcing big airlines to consider chopping prices and other measures to win back budget-conscious travellers drawn to low-fare rivals, such as Norwegian.

The U.S. DOT declined to comment on Thursday.

"All options foreseen under the EU-U.S. Open Skies agreement are open," an EU official said.

The person said the EU would press on with arbitration but dismissed talk of tit-for-tat retaliation. (Reporting by Joachim Dageborg; Additional reporting by Jeffrey Dastin in Washington and Julia Fioretti in Brussels; Writing by Victoria Bryan; Editing by Adrian Croft and Alexandra Hudson)