Norwegian CEO Bjorn Kjos is a former fighter pilot, lawyer and he’s written a thriller novel, perfectly qualifying him for the seemingly never-ending regulatory battle his company has tackled to operate services between Ireland and the US.

More than two years after Norwegian’s Irish subsidiary Norwegian Air International (NAI) applied to the US Department of Transportation (DOT) for a US foreign carrier permit, DOT finally gave tentative approval in April. But the waiting continues as labor groups log more protests.

The lack of a foreign carrier permit has not blocked Norwegian from operating transatlantic services—it already has a very active long-haul, low-cost network and routes include Oslo-Orlando—but company growth is being limited by the delays on NAI approval.

“I am used to battles. I chased a lot of Russian aircraft away from the Norwegian border during my time [in the military], but I thought I was friends with the US,” Kjos said in an interview before tentative approval was granted.

Kjos said his opponents “hate competition” and “they don’t like us flying new aircraft for a fraction of the price [they charge].” US carriers and unions say the Irish operation is designed to circumvent Norway’s strict labor laws, a claim Norwegian denies. Instead, the Norwegian CEO argues he is creating jobs and promoting tourism.

Norwegian’s works by the typical low-cost model, on both its short- and long-haul services. It operates a young, highly utilized fleet, with minimal crew nightstops.

“Is there any secret to long-haul, low-cost? I’m sorry to say it’s the same as short-haul,” Kjos said.

He went on to tell the story of a conversation he had with his CFO back in the early days of the company. Norwegian faced a Catch 22 situation. Kjos calculated that when oil hit $125 a barrel, Norwegian would go bankrupt unless it bought newer, more efficient aircraft. However, if it bought newer, more efficient aircraft, it would go bankrupt.

Kjos said to his CFO: “Well, do you want to go bankrupt with old aircraft, or new aircraft? If we hadn’t done that [bought new aircraft], we wouldn’t have survived.”

New Boeings

The new-aircraft strategy brought problems beyond cost. Norwegian’s long-haul, low-cost model is dependent on operating the right aircraft and the Boeing 787’s entry-into-service issues caused huge disruption to its operation. This meant Norwegian was forced to operate Airbus A340s instead. “That didn’t go very well,” Kjos noted. “The A340 is not the aircraft of the future.”

Norwegian persevered and now operates eight 787-8s and a single 787-9, and this is set to grow to 40 aircraft by 2020. Norwegian’s order for 100 Boeing 737 MAX highly efficient narrowbodies will also help with its long-haul expansion, as it plans to operate them on transatlantic services.

Kjos is considering placing a follow-on order for more Boeing 787-9s in “a couple of years,” which he would use to expand its London Gatwick 787 operation to 50 aircraft. He also wants to add 100 short-haul aircraft to the south London base, although there is no immediate need for a follow-on narrowbody order.

“Outside Scandinavia, London Gatwick is by far our most important base,” Kjos said. But any growth depends on Norwegian securing more Gatwick slots, which would require a second runway. Heathrow and Gatwick are both battling to secure an extra runway, a decision that rests with the UK government.

Any follow-on order would purely be for 787-9s, rather than the -8 variant. “The -9 has a lower seat cost and we only go with seat costs,” he said. However, Kjos has no plans to dispose of Norwegian’s eight -8s. “We need them [-8s] to open new routes; they are very good for new markets.”

LCC partnerships

The low-cost model also depends on volume and, while Norwegian has a strong short-haul network, Kjos is looking to create partnerships with low-cost carriers easyJet of the UK or Ryanair of Ireland. These are his two targets, mainly because of their strong networks. “If we could get a system to work to get connectivity with easyJet or Ryanair, we would be very happy. They are very good airlines to work with,” Kjos said.

For a tie-up to work, it would need information to be exchanged between the airlines’ IT systems. Historically both easyJet and Ryanair have said they do not want to shoulder any additional complexity, but Kjos said he is willing to take the hit, but added, “We don’t need it. It’s the cherry on the cake.”

Kjos is less keen on partnering with legacy airlines, or their offshoots, such as Lufthansa Group’s Eurowings, because their networks are less complimentary and this would involve greater complexity and higher costs.

While easyJet and Ryanair have shifted their focus to attract more business travelers, Kjos believes there is still huge leisure potential. “Growth in the industry will not come from the business market, it will be the leisure market,” he said. “Are businessmen dying out? No, there will still be some in the next generation, I hope, but the problem is people only start to travel when GDP is higher.”

It is also a challenge to secure slots at congested airports, such as New York JFK, pushing Norwegian to create secondary point-to-point leisure routes. “That means the leisure market, whether we like it or not.”

So Norwegian’s operations remain focused into key European leisure hubs, such as London, Paris and Rome. “They don’t want to go to Frankfurt or Helsinki. That’s not the target for tourism,” Kjos said.

And it seems to be working. Kjos said his long-haul network is profitable. “It’s just about opportunities,” he said.

Meanwhile, progress toward launching NAI service to the US from Cork and Shannon inches through Washington DC’s bureaucratic process.  The US stalled giving a yes or no to NAI’s permit application and labor groups on both sides of the Atlantic accused NAI of operating under maritime-like “flag of convenience” operations, skirting labor, regulatory and safety rules, and using Asian crews.

But DOT, which also called on specialist legal teams at the US Departments of Justice and State in its scrutiny of NAI’s application, said in April it could find no legal or labor reason to deny the permit and awarded tentative approval pending objections and responses. As of mid-May, that process continued.

“Airline employees, passengers and cargo shippers have raised their voices in united opposition because NAI’s business plan is designed to undermine labor standards and the intent of one of this country’s international trade agreements,” Air Line Pilots Association International president Tim Canoll said in a statement in May as pilots and flight attendants protested outside the White House.

But supporters of NAI, including NAI consultant and former State deputy assistant secretary John Byerly said some of the opposition’s accusations were “utterly false” and that statements on the safety card were “both false and slanderous.”

“[NAI’s] headquarters is in Dublin and it has 80 employees there and its aircraft are registered there,” Byerly said. “The pilots must have European licenses and operate under the oversight of the Irish regulatory authority.”