Norwegian Faces Regulatory Hurdle in Widerøe Acquisition as Watchdog Issues Interim Refusal

Norway’s competition authority (Konkurransetilsynet) has dealt a provisional setback to Norwegian’s (Oslo Gardermoen) planned acquisition of Widerøe (Bodø), expressing concerns about potential competition weakening in the aviation market. The watchdog’s assessment suggests that if the acquisition is approved, it could lead to higher prices and reduced flight options for passengers.

The authority had initially raised concerns in mid-September, and this latest announcement indicates a potential ban on the deal. If the acquisition proceeds, it would leave only two major players, Norwegian and SAS Scandinavian Airlines, competing for passengers in Norway.

Tina Søreide, the regulator’s director, explained, “The acquisition would lead, among other things, to us going from three to two players on several domestic routes. We see a real risk that competition in the market could be weakened in a way that leads to higher fares and a worse range of routes.”

The authority identified the risk of diminished competition on routes where Norwegian and Widerøe currently overlap, such as between Bergen and Stavanger or Bergen and Trondheim. There is also concern about potential coordination of prices on the domestic network with only two major players.

A notice has been sent to Norwegian, stating that the authority is considering banning the acquisition. While Norwegian proposed remedial measures linked to ground services, the authority deemed them insufficient to address all competitive concerns.

Norwegian expressed surprise at the reasoning provided by the authority and disagreed with the preliminary conclusion. The airline emphasized that Norwegian and Widerøe have minimal overlapping routes, operate different aircraft fleets, and complement each other’s operations. The companies have until December 8 to respond to the preliminary assessment, with the final decision deadline set for January 3, 2024. The proposed acquisition, valued at NOK1.125 billion kroner (USD105 million), was announced on July 6.