EU says U.S. delay on Norwegian Air licence breaches aviation deal

By Foo Yun Chee

BRUSSELS, Dec 2 (Reuters) - The United States has violated an aviation deal with the European Union by taking too long to grant a licence allowing budget airline Norwegian Air to boost transAtlantic flights, the European Commission said on Tuesday.

Norwegian Air, which currently flies to the United States on a temporary licence from non-EU Norway, is seeking a foreign carrier permit for its Irish subsidiary with the backing of the EU executive.

The move is opposed by U.S. rivals such as Delta Air Lines (NYSE: DAL - news) Inc, American Airlines Group, United Continental (NYSE: UAL - news) Holdings Ltd, as well as airline and labour unions. They worry it will undermine U.S. wages and working standards.

Commission and US officials met on Nov. 25 to discuss the case.

"The European Commission considers that there is a breach of the EU-US air transport agreement by the U.S. authorities... The U.S. authorities are taking too long to process the application," the EU executive said in a statement.

It said previous applicants were given the go-ahead swiftly. The Commission said the next meeting of the EU-U.S. joint committee is scheduled for January.

Under the 2007 open-skies agreement, EU airlines can fly to the United States from anywhere in the 28-country bloc, while the same holds for U.S. airlines servicing Europe.

Norwegian Air's plans are backed by some leading industry executives in Europe. Willie Walsh, the CEO of British Airways parent IAG, has said that he supports the discount carrier's expansion.

Norwegian Air, a unit of Ireland (Other OTC: IRLD - news) -incorporated Norwegian Air Shuttle ASA and Europe's third-largest low-cost carrier, is seeking to bring long-cost flying to long-haul flights. (Additional reporting by Victoria Bryan in Frankfurt; editing by Susan Thomas)