U.S. regulators on Thursday dismissed an initial application from European discount airline Norwegian Air Shuttle A/S to establish a new long-haul operation in the U.K.

The U.S. Department of Transportation will continue to review the controversial carrier's plan and is still to finalize its approval for a license for the airline to establish a base in Ireland for long-haul flights.

Norwegian Air needs approval from U.S. authorities for overseas bases that operate flights to the U.S. The U.K. and Irish bases have come under criticism from some airlines and labor groups. Critics have said the airline is trying to circumvent some labor and tax rules with the overseas bases to lower its costs, charges Norwegian denies

U.S. regulators said they needed more time to review the application from Norwegian Air U.K., which has already secured support from British aviation authorities.

Norwegian Air is the first of the new breed of low-cost airlines to launch flights to Asia and across the Atlantic from Europe.

The Transportation Department's decision won't affect Norwegian's current trans-Atlantic services to the U.S., which it flies using a license granted by Norwegian regulators. U.S. approval would allow it to use the same aircraft for flights to other countries such as Brazil and South Africa, as well as the U.S.

Opponents of Norwegian's overseas bases had staged a last-ditch effort to block approval from the U.S., arguing that the Brexit vote left the future of aviation agreements with the U.K. up in the air.

Norwegian Air wasn't immediately available for comment.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

June 30, 2016 17:25 ET (21:25 GMT)