Biden Administration Encouraged To Block Norse Atlantic Startup – Simple Flying


A US lawmaker has urged the Biden Administration to block startup carrier Norse Atlantic Airways from flying to the States. The news comes as Norse announced plans to fill the gap left by Norwegian’s withdrawal from long-haul flights to the US. Norwegian and US carriers have long been in a fare war due to the former’s cheap tickets across the Atlantic.

Norwegian B787
The US lawmaker does not want to see Norse fill in Norwegian’s shoes on long-haul routes. Photo: Vincenzo Pace | Simple Flying

Block

According to Reuters, Representative Peter DeFazio has urged Transportation Secretary Pete Buttigieg to block Norse Atlantic from flying to the US. DeFazio, a Democrat who is the chair of the House Committee on Transportation and Infrastructure, argues that Norse is trying to work around Norway’s strong labor protections by registering in Ireland instead.

Using this “flag of convenience” should be grounds for the DOT to block Norse Atlantic’s request for a foreign air carrier permit. However, flags of convenience are rarely a major issue among airlines as subsidiaries often operate from different countries. Just this month, the DOT approved Aer Lingus UK’s request to fly from Manchester to the US.

Aer Lingus A330-300
A flag of convenience is a practice where a company registers in a specific country to gain benefits or avoid rules from the home country. Photo: Vincenzo Pace | Simple Flying

However, Rep. DeFazio’s issues run deeper than just Norse’s plans to fly across the Atlantic. He also argues that Norwegian Air was “imprudently issued” permission to start flights to the US in 2016. More context about this argument will be available in the coming weeks, but there could be an underlying sentiment here.

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Underlying issue

Norwegian’s entry into the long-haul flights in 2016 shook up the transatlantic market. Dominated by full-service airlines across continents, Norwegian’s dirt-cheap fares forced a price war on key business and leisure routes, hurting profits. Suddenly, $200 tickets across the pond were within possibility.

However, Norwegian’s model proved to be unsustainable and the airline was quickly burning cash and racking up losses. Other low-cost, long-haul airlines also started shutting down post-2018, easing pressure on the market. However, even in 2019, Norwegian was operating 74 routes to the US.

American 787-9
US airlines quickly felt the pressure of Norwegian but responded with basic economy fares, hurting Norwegian’s market base. Photo: Vincenzo Pace | Simple Flying

When Norwegian’s officially axed all long-haul flights in January, full-service airlines undoubtedly breathed a sigh of relief. However, Norse has quickly jumped up to fill this gap in the market. Another low-cost competitor would hurt US airlines as this difficult time, eating into a potential leisure travel recovery this year. With business travel being slower to recover, all airlines are focused on tourism travel for the coming years.

What will happen?

It’s early to know what will come of Rep. DeFazio’s request to the Biden Administration. It’s unclear if Norse has even requested permission to fly to the US right now. However, expect more such arguments in the coming months as the airline prepares to begin flying.

Should the US ban Norse Atlantic? Would you fly with them? Let us know your thoughts in the comments!



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