US regulators have tentatively approved a foreign air carrier permit for Norwegian's Irish subsidiary, more than two years after the request first sparked a contentious debate over open skies and labour laws.

The tentative decision by the US Department of Transportation (DOT) will likely lead to pushback from Norwegian's US opponents, who had lobbied strongly against the carrier being granted a permit for its Norwegian Air International (NAI) subsidiary.

"NAI appears to meet DOT’s normal standards for award of a permit and that there appears to be no legal basis to deny NAI’s application," says the regulator in a statement.

In a show cause order issued today, the DOT invites comments within 21 days from those who object to its tentative decision.

Norwegian group chief executive Bjørn Kjos welcomes the DOT's tentative decision, and calls for the regulator to make it final.

“A final approval, based on the open skies agreement between the US and EU, will be win-win for consumers and the economy on both sides of the Atlantic. It will allow Norwegian to expand our US operations. Our continued presence in the US will create thousands of jobs and generate tens of millions of dollars of economic activity for the group’s US destinations," he says.

NAI had first applied for a foreign air carrier permit in late 2013, but encountered substantial opposition from US and foreign carriers as well as labour unions. Its critics accused the carrier of circumventing labour laws in order to offer low-cost service.

DOT says it went to "great lengths" to consider the labour-related concerns. "DOT took the unprecedented step of formally consulting two agencies with special expertise on international law, the Department of Justice’s Office of Legal Counsel (OLC) and the Department of State (DOS), to solicit their views," it adds.

NAI's opponents had repeatedly cited an article in the US-EU air transport agreement in its accusations that the airline would undermine labour standards.

However, the DOT says that the provision "does not afford a basis for rejecting an applicant that is otherwise qualified to receive a permit".

The DOT's tentative decision will likely prompt an outcry from NAI's opponents, who did not immediately comment. Those who had opposed the airline's application include US majors Delta Air Lines, United Airlines, American Airlines as well as European carriers Lufthansa, SAS, Air France-KLM and Austrian Airlines.

Major pilot union Air Line Pilots Association and several other US airline labour groups were also against NAI's application.

NAI received support from FedEx, Atlas Air, a handful of airports and some travel trade associations.

Norwegian already operates long-haul service to the USA, but said it had wanted to transfer these flights to NAI to utilise EU traffic rights.

Source: Cirium Dashboard