US approves flights by Norwegian Air Shuttle subsidiary

Economic IndicatorsAssociated Press

Discount airline Norwegian Air Shuttle has won permission from federal authorities for its disputed plan to expand flights to the U.S.

The decision was a defeat for several large U.S. airlines and their labor unions. They accuse Norwegian of getting around Norway's labor and tax laws by operating new flights with a subsidiary based in Ireland. They fear the subsidiary will undercut them on wages and fares.

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The Transportation Department said in a regulatory filing Friday that it approved a foreign air-carrier permit for the subsidiary, which is called Norwegian Air International.

Regulators said they consulted legal experts in the State Department and Justice Department and found no grounds to reject the application.