Norwegian and Widerøe have received a warning that Norway’s Competition Authority might intervene in Norwegian’s acquisition of Widerøe.
In September, The Competition Authority notified the carriers that it needed to study the deal further.
The Norwegian Competition Authority expressed concern over the acquisition of Widerøe by Norwegian. They worried it may hinder competition in the Norwegian air travel market. To assess the impact of this acquisition, the Authority has gathered and analyzed information from various stakeholders.
Based on their initial findings, the Authority believes the acquisition may undermine competition in the air travel market. If this leads to higher prices and limited options for Norwegian air passengers, the Competition Authority can prohibit the acquisition.
“The market for air travel is a large and significant market for Norwegian consumers. Well-functioning competition is crucial to ensure that Norwegian air travelers have access to the best possible offers at the lowest possible price. Further analyses of how Norwegian’s acquisition of Widerøe will affect the competition in this market are needed,” said Norwegian Competition Authority Director Gjermund Nese.
“Our preliminary assessment is that there may be reason to fear that the acquisition will impact Norwegian air passengers negatively. Going forward, the Competition Authority will more thoroughly consider the case to find out if the acquisition should be prohibited,” said Project Manager Katrine Amdam.
Assessment Deadline Results in 70-Day Warning
According to the Competition Act, the Competition Authority was to release a new assessment by November 17th. This assessment determines whether the Competition Authority would permit the acquisition or if there are grounds to prohibit it. On reaching the deadline, the Competition Authority issued a legally imposed 70-day warning that it might intervene.
“We are surprised by the Competition Authority’s notification of a possible halt to the acquisition. The dialogue with the supervisory authority has been good and constructive, and we have submitted extensive documentation within the deadlines they have set. Based on the facts of the case, I am optimistic about the final outcome of the application process. We will now familiarize ourselves with the Norwegian Competition Authority’s preliminary assessment before we respond to them,” said Geir Karlsen, CEO of Norwegian.
“I am very disappointed by today’s notice from the competition authorities. With Norwegian, we will get a solid Norwegian industrial owner who wants to develop both companies further. This will ensure absolutely necessary public transport in the rural areas, in addition to safeguarding an attractive offer for continuous flights throughout Norway, says Stein Nilsen, CEO of Widerøe.
Norwegian and Widerøe Agree on Need for Stronger Aviation Industry in Norway
Norwegian and Widerøe agree that Norway needs a stronger aviation industry to provide a good travel experience for Norwegian passengers. The airlines note that the European aviation industry is undergoing significant changes. Even if Norwegian and Widerøe join forces, they argue they would still be a small player on the international stage.
“Our goal is to create an even better and comprehensive offer for all Norwegian passengers, not least in terms of continuous journeys. Widerøe and Norwegian have very few overlapping routes and complement each other with different aircraft fleets and different operations. Both companies will continue to have bases, head offices, and employees in Norway in the same way as today. Widerøe will remain its own brand, and the company will maintain existing agreements with other airlines,” says Karlsen.
Norwegian has until December 8th to respond to the notice received today. The Competition Authority has set the final deadline for their decision on January 3, 2024. However, if there are no reasons for intervention against the acquisition, the authority can end the proceedings earlier. Norwegian and Widerøe are working closely with the Norwegian Competition Authority, sharing all necessary information to obtain approval for the transaction as soon as possible.