U.S. should deny market access to Norwegian budget airline - lawmaker

By David Shepardson

WASHINGTON (Reuters) -The chairman of the U.S. House Transportation and Infrastructure Committee on Wednesday urged the Biden administration to deny a permit for a new low-cost Norwegian carrier to enter the domestic market.

Representative Peter DeFazio, in a statement released ahead of a hearing Thursday, urged Transportation Secretary Pete Buttigieg to deny Norse Atlantic permission to enter the U.S. market.

Last week, Reuters reported the budget airline planned to fly from U.S. destinations such as New York, Los Angeles and Miami to European cities including London, Paris and Oslo, with a goal of launching its first flight in December this year.

A spokeswoman for Buttigieg declined to comment ahead of the hearing.

Norse, which is in the process of raising 1.28 billion Norwegian crowns ($149 million) from institutional investors ahead of an expected stock market listing in Oslo next month, said it was confident of receiving the required permits.

"The operation will be in line with the agreements that regulate air traffic between Europe and the U.S," Norse said in a statement.

Bjoern Kjos, founder and former CEO of Norwegian Air, holds a 15% stake in Norse Atlantic, which is majority owned by Bjoern Tore Larsen, a co-founder of staffing company OSM Aviation, Norse Atlantic Airways said in a statement announcing the new carrier last week.

The airline will seek to fill a gap left by Norwegian, which offered low-cost transatlantic flights until mounting debt and the collapse of travel due to the COVID-19 pandemic forced it to exit its long-haul business, leaving a slimmed-down airline focusing on Nordic and European routes.

DeFazio argued the Transportation Department in 2016 "imprudently issued" a foreign air carrier permit to Norwegian Air's long-haul business, which he said was incorporated in Ireland to avoid Norway's strong labour protections.

"It is imperative that you correct the error of 2016 and deny this airline's application," he said of Norse Atlantic.

The new carrier rejected the comparison with the now-defunct airline.

"Norse Atlantic Airways is a Norwegian company," CEO Bjoern Tore Larsen told Reuters in an email.

The 2016 decision followed a years-long battle between U.S. airlines and Norwegian, setting off an ever-escalating transatlantic fare war between U.S. carriers and foreign budget competitors.

"We know that American consumers want an airline that can fly them safely and comfortably across the Atlantic at a low fare, and we at Norse Atlantic will deliver just that," Larsen said.

"We will have permanent employees in the USA, in the air and on the ground. We will use Boeing Dreamliner planes and we of course respect the employees' right to unionize if they wish to do so," the CEO said.

($1 = 8.6110 Norwegian crowns)

(Reporting by David Shepardson in Washington and Terje Solsvik in Oslo. Editing by Chris Reese, David Gregorio and Mark Potter)