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You may have noticed that in recent months, inexpensive airfares from the US to Europe — often for under $500 — have been popping up with surprising regularity. This is due, in part, to low-cost European and Scandinavian airlines (such as Norwegian Air and WOW) expanding to more routes between the US and Europe.
Last week, we got some news that’s likely to continue driving prices down. Norwegian’s Irish subsidiary, Norwegian Air International (or NAI) has finally received approval to operate in the United States.
What Are The Details?
NAI has been after a permit from the US Department of Transportation for two years. Part of the complication has come from this fact: there’s an open skies agreement allowing US or European Union carriers to operate flights between the US and the EU. However, Norway is one of only a handful of European countries that are not part of the EU. Because Ireland is part of the EU, by opening an Irish subsidiary, Norwegian should have been able to take advantage of this agreement.
However, there have been strong objections from various North American airlines and unions, who claim that Norwegian is using this tactic to pay less by avoiding labor laws. US-based airlines have naturally been concerned that this would allow NAI to offer unfairly low prices and gain an advantage over American airlines.
Exactly how this will play out remains to be seen, of course, since the approval was just announced on Friday, December 2nd.
While it may turn out to be a loss for US airlines and their workers, it’s likely to be a win for passengers. Unfair or not, the added competition from a low-cost European airline is likely to help sustain (or even lower) the great prices we’ve been seeing recently — as well as encourage North American carriers to continue lowering their prices.
And it’s not just a win for passengers, either. Norwegian has said it will purchase Boeing 787 Dreamliners for its NAI flights, which is a great win for the aircraft company. This decision by the DoT after NAI’s long struggle for approval will also set a precedent that will allow other international airlines to operate more easily in the US.
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