February 9, 2017 / 7:14 PM / 8 months ago

Norwegian Air seeks to fly Siberian Corridor in eastward push

Parked Boeing 737-800 aircrafts belonging to budget carrier Norwegian Air are pictured at Stockholm Arlanda Airport, Sweden, March 6, 2015. REUTERS/Johan Nilsson/TT News Agency/File Photo

OSLO (Reuters) - Norwegian Air (NWC.OL) is lobbying its government to scrap a deal which prevents it from flying the “Siberian Corridor” over Russia, the shortest route between Scandinavia and Asia. Russia only allows one airline per country to use its airspace and under the terms of a 1956 Soviet-era deal with Denmark, Norway and Sweden only Scandinavian Airlines (SAS.ST) and Aeroflot (AFLT.MM) can fly the route.

Since Scandinavia is three countries and SAS, which is partly owned by all three, only flies direct to Asia from Denmark and Sweden, Norway should rework the deal, Norwegian Air argues.

Europe’s third-largest budget airline by passenger numbers after Ryanair (RYA.I) and EasyJet(EZJ.L) has to take a longer, more expensive route for its flights to Thailand.

Now Norwegian Air wants to fly elsewhere in Asia and its executives met Norway’s foreign minister Boerge Brende on Tuesday to see if the deal could be replaced.

“We have our planes ready to go and we want to start flying these direct routes to Asia as soon as possible, but we can’t because of this incredibly outdated deal,” its spokeswoman said.

“Most of these Asian routes will never happen if we are not allowed to fly over Siberia. It would be so much more expensive that we haven’t even bothered to do the maths.”

Norway’s transport ministry said it plans to bring up the case during the first half of 2017.

“Norwegian authorities are continuously assessing how these rights may best be secured in the negotiations with Russia,” it wrote in a statement.

Scandinavian Airlines said it would not stand in the way of a new deal, while Russia’s flights authority did not immediately comment.

“We would very much like to see free competition over Siberia, and have lobbied for this on several occasions”, an SAS spokesman said.

Norwegian Air, which has previously said it would be interested in flying direct to China, Japan, Hong Kong, India and Pakistan, hopes a new deal will open up the route to other airlines and aims to take a larger share of the Asia-to-Europe market, helped by its ability to offer cheaper airfares.

And with an increasing number of flights between the U.S and Europe, Norwegian Air believes it can create a new “highway” from the U.S. to Asia via Norway’s capital.

“Right now we are stopped by this outdated deal, but we hope that will change,” the spokeswoman said, adding it would also consider direct routes to several Russian cities.

Norwegian Air has ordered $18.5 billion worth of planes from Boeing (BA.N) so far, including a deal for up to 29 Dreamliners in October 2015, and after its Irish subsidiary was granted approval for trans-Atlantic routes to the U.S in December, it said it would consider buying even more planes.

Additional reporting by Gleb Stolyarov in Moscow; Editing by Alexander Smith and David Evans

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