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Norwegian Air pilots call off strike

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
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

OSLO (Reuters) - Some 600 pilots of budget airline Norwegian Air Shuttle called off a planned strike on Monday after four days of government mediation yielded a deal that secures their current work agreements.

Pilots threatened to walk out in protest at Norwegian's decision to transfer them to new operating companies in various countries around Europe, which they claim could lead to deteriorating contract terms.

Under the deal, pilots will have joint collective agreements in Scandinavian countries, which still form the core of the firm's operations, and pilots elsewhere will get equal career opportunities, trade union Parat said.

"We have an agreement that we can be happy with," talks mediator Nils Dalseide told reporters on Monday, flanked by Norwegian Air's Chief Executive Bjoern Kjos and union negotiator Halvor Vatnar.

Norwegian shares eased off an earlier low to trade down 1.4 percent, outperforming a 4.5 percent fall in the Thomson Reuters EU Airlines Index <.TRXFLDEUPUARLI>.

Tensions between management and unions have risen this year after the airline decided to hire Thai cabin crew for its long-haul operations at a fraction of the wages paid to its Scandinavian workers.

Norwegian is expanding rapidly, opening bases in Britain and Spain, well outside its traditional Nordic market and raising the prospect that its new operating structure would jeopardize jobs in Scandinavia, where it faces some of the highest wage costs in the industry.

Had the strike gone ahead, it would have been the first major industrial action at the company.

(Reporting by Joachim Dagenborg; writing by Gwladys Fouche; editing by Louise Heavens)

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