February 23, 2017 / 1:49 PM / in 7 months

Norwegian Air to offer U.S.-Europe fares starting at $65 one way

A Norwegian Air Shuttle Boeing 737-800 is seen in the air near Oslo Airport, Gardermoen in this July 17, 2009 file photo. REUTERS/Kyrre Lien/Scanpix

(Reuters) - Norwegian Air Shuttle ASA plans to offer transatlantic flights on 10 new routes between the United States and Europe with tickets starting at $65 one way, putting pressure on U.S. and European rivals to compete, it said on Thursday.

Norwegian is expanding its network of flights to the United States starting in mid-June after receiving long-awaited U.S. approval in December for its Irish subsidiary Norwegian Air International to operate routes across the Atlantic.

Established U.S. carriers have been forced to consider restricted cheaper fares and redesigned cabins with more seats to win budget-conscious travelers to compete with Norwegian and rival Icelandic carrier Wow Air.

Norwegian’s $65 fares will be for a one-way ticket to UK and Irish destinations from smaller airports in New York state, Providence, Rhode Island, and Hartford, Connecticut.

Destinations include Belfast, Northern Ireland; Cork, Dublin and Shannon, Ireland; and Edinburgh, Scotland.

“I pay for what I want, you pay for what you want. We don’t pay for what everybody else on the plane wants,” Norwegian Air spokesman Anders Lindström said of its fares.

The burgeoning competition on transatlantic routes has prompted action by more established European airlines.

British Airways and Iberia owner IAG is planning to start low-cost transatlantic flights from Barcelona this year to U.S. destinations. Chief Executive Officer Willie Walsh said earlier this month IAG has been pushed by the Norwegian carrier’s model to look at new ways to operate.

Meanwhile, Air France, part of Franco-Dutch group Air France-KLM, also plans a new low-cost unit in a project dubbed Boost, while Lufthansa is expanding long-haul budget flying through its Eurowings business.

Norwegian Air’s expansion strategy has helped it to more than double revenue since 2012. Last year revenue rose 16 percent to 26 billion Norwegian crowns ($3.12 billion) and the company has placed orders for 260 aircraft from Boeing and Airbus, which it will receive over several years.

$65 ‘EXTREMELY LIMITED’

The company said only a limited number of one-way tickets will be offered at $65, with the next pricing tier starting at $99.

By comparison, a one-way ticket from New York to Dublin in mid-June on other airlines ranges from about $655 to $2,755 on the Expedia travel website.

The common practice for low-cost carriers is to offer super low fares for a restricted number of tickets.

“Availability of the fares advertised for each scheduled flight is extremely limited,” Norwegian warns customers on its website.

The nonrefundable low price does not include baggage, food and drink, a seat reservation, headphones, blanket or other perks. Add in the extras, coupled with the limited number of seats, and the ticket rises to a higher price.

To keep costs down, Norwegian will fly from the smaller U.S. airports with lower fees, using narrow-body 189-seat Boeing 737-MAX aircraft, due to be delivered later this year.

The planned U.S. destinations are Stewart International Airport in Orange County, New York, about 70 miles from New York City; T.F. Green Airport in Providence and Bradley International Airport in Hartford.

Norwegian will continue to fly wide-body Boeing 787 Dreamliners to larger U.S. airports, the company said.

($1 = 8.3293 Norwegian crowns)

Reporting by Alana Wise in Washington, Victoria Bryan in Munich and Terje Solsvik in Oslo; Additional reporting by Jeffrey Dastin in San Francisco; Editing by David Goodman and Jeffrey Benkoe

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