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Norwegian Air's UK arm can fly transatlantic, boosting its prospects
September 23, 2017 / 12:45 PM / 3 months ago

Norwegian Air's UK arm can fly transatlantic, boosting its prospects

OSLO (Reuters) - U.S. authorities have granted permission to budget airline Norwegian Air Shuttle’s (NWC.OL) British subsidiary to fly to and from U.S. cities, a boost to a company trying to crack the transatlantic market by undercutting established rivals.

Europe’s third-largest budget airline by passenger numbers after Ryanair (RYA.I) and EasyJet(EZJ.L) could already fly to and from the U.S. on its Norwegian and Irish operating licences.

The permit now granted to its British company by the U.S. Department of Transportation allows the airline to expand its operations at London’s Gatwick airport.

“With a U.S. foreign carrier permit also now received for NUK (Norwegian UK), Norwegian will be able to establish a seamless operation and more effectively utilise its long-haul fleet,” the company said in a statement on Saturday.

Norwegian Air said the decision would mean it would add “thousands more jobs” to the 1,000 pilots and crew already working for the carrier from Gatwick, offer new routes and cheaper fares.

It is a boost at a time when the airline is under pressure to control costs and shore up its balance sheet to weather fierce competition.

Norwegian Air has embarked on an ambitious expansion plan, buying more than 200 new fuel-efficient jets, yet investors worry its drive to put more passengers on more planes is pushing up costs quickly without producing higher returns.

    Doubts are creeping in because Norwegian’s fate rests on the still unproven strategy of adapting the success of low-cost short-haul travel to long-haul routes.

    The firm’s shares are down 26 percent over the past year and have been the subject of heavy short-selling in recent months.

    Countering those doubts, the airline’s CEO and chairman raised their holdings in the company by 10 percent on Sept. 14.

    Reporting by Gwladys Fouche; Editing by Andrew Bolton

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