* Suspends talks on Boeing plane due to US govt delay
* CEO says in letter that may rebase long-haul fleet in
* Share price falls after comments
(Adds detail from the CEO's letter)
By Joachim Dagenborg and Terje Solsvik
OSLO, April 28 Budget airline Norwegian Air
has suspended talks on buying 20 Dreamliner planes from
Boeing because of a delay in receiving U.S. backing for
its long-haul plans, Chief Executive Bjoern Kjos said in a
The airline may also reconsider plans to locate its
long-haul operations in Ireland, giving up the advantage of
having a European Union-based carrier, Kjos told Irish transport
minister Leo Varadkar in a letter dated April 23.
Norwegian launched flights to the U.S. and Bangkok from its
Nordic bases last year and obtained an Irish air operators'
certificate, hoping to base the business in the EU, where it can
operate under more favourable conditions and take advantage of
the Open Skies trade between the U.S. and the EU.
Norwegian is operating its flights to the U.S. under a
temporary permit issued by the government in Oslo.
Its application to the U.S. Department of Transportation for
a permanent licence, made via Norwegian's Irish affiliate, has
been fiercely contested by its rivals and by unions.
They argue that Norwegian is simply trying to escape high
Nordic labour costs and wants to employ cheap Thai crew, gaining
an unfair advantage.
"Unfortunately, the delay in the DOT process has given us no
other choice than to put our ongoing negotiations with Boeing to
purchase 20 new 787-9 Dreamliner aircraft - due to be registered
in Ireland - on hold until Norwegian Air International's future
in the U.S. has been decided," Kjos said in the letter seen by
Reuters on Monday.
"An additional delay - or in the worst case, a negative
decision by the U.S. DOT - may regrettably force us to reverse
our commitment to build an international long-haul airline in
Norwegian has been expanding at breakneck pace in recent
years and has more than 200 aircraft on order. It is opening
bases across Europe and plans to take on one of the most
competitive markets this summer, launching long-haul flights
between London and New York.
If it left Ireland, where its long-haul planes are
registered, it would rebase them in Norway, where it has a
permit to operate, Kjos said.
The firm already has commitments to buy or lease 14
Dreamliners but it has been looking for additional planes,
because it consumes 20 percent less fuel than older jets, giving
the firm a cost advantage. The 20 new Dreamliners have a
combined list price of $5 billion.
Norwegian shares fell on news of Kjos's comments but later
recovered some ground, trading 0.5 percent lower at 1421 GMT,
lagging a 0.1 percent gain in the broader market.
(Editing by Balazs Koranyi, John Stonestreet)