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Norwegian to add U.S-Barcelona flights, increasing competition

By Jeffrey Dastin

Sept 7 (Reuters) - Norwegian Air Shuttle ASA on Wednesday said it planned to start flights to Barcelona from four U.S. cities next summer, heightening competition with U.S. rivals to the popular tourist destination.

The announcement comes as Delta Air Lines Inc and others say Norwegian is adding flights that exceed traveler demand, pushing down fares and hurting airlines' revenue. As major U.S. carriers scale back their growth plans in Europe, Norwegian is taking up some of the slack.

"It's an opportunity, I would say," Norwegian's Chief Commercial Officer Thomas Ramdahl said in an interview, suggesting his airline can operate some routes more efficiently than U.S. carriers.

"A network carrier could pull out because it's more profitable for them to (connect) through a bigger city rather than having a direct flight," he said. "Looking at (our) flying point-to-point - it will boost the market, and it will also probably steal from the hubs" of major airlines.

The Barcelona flights underscore the ambitions of Europe's third-biggest budget carrier, which started New York-Paris flights in July, to rapidly expand its long-haul business from the United States.

Norwegian is taking advantage of an aviation agreement to liberalize travel between the United States and the European Union, updated in 2011, which allows airlines from non-E.U. states Norway and Iceland to fly anywhere between the two blocs.

The carrier has also relied on the fuel-efficient 787 jetliner from Boeing Co to keep costs low and cut fares on trans-Atlantic routes.

Some 20 percent of passengers on those flights likely are snatched from rivals, while the majority are choosing their European destinations in the first place because of Norwegian's low fares, Ramdahl said.

Flights to Barcelona from Los Angeles will start on June 5, followed by service from greater New York, greater San Francisco and greater Miami. Launch fares will be about half current New York-Barcelona fares booked in advance.

The company is looking at starting trans-Atlantic service from Baltimore, Chicago and Seattle, Ramdahl said, as well as Cuba. Long-haul service to Rome is under consideration for 2018, he said.

"The pie will get bigger, but I would think that the (low-cost) long-haul part would take the majority of it," he said.

Norwegian's growth is not an exact replacement of flights U.S. airlines have cut. The routes in question are different, and Norwegian's capacity additions are incremental because flights often are not daily.

That has not stopped U.S. airlines and unions from taking issue with the company. They say service to the United States from Norwegian's Irish subsidiary would undermine wages and working standards - claims Norwegian has denied.

U.S. regulators have not finalized approval of flights operated by the Irish subsidiary - such as Boston-Cork, Ireland - for more than two years. In July, the European Commission said it was requesting arbitration because of the delay.

(Reporting By Jeffrey Dastin in New York; Editing by Bill Rigby)