Norwegian and its Acquisition of Widerøe: Competition Concerns and Regulatory Scrutiny

The competition authority of Norway has stated that it requires a more detailed analysis of the acquisition proposal of Widerøe by Norwegian. According to the government, «competition in the Norwegian air travel market could face challenges if Norwegian is allowed to acquire the company».

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In early July 2023, Norwegian announced its acquisition intention of the regional airline Widerøe. As part of this process, the Norwegian regulatory competition authority has meticulously gathered and examined information from the involved parties and other stakeholders in the same market.

In their preliminary assessment, the office suggests that there could be a detrimental impact on competition within the air travel market. If such an impact results in an increase in fares and a reduction in the range of Norwegian air services, the government has the authority to halt the acquisition.

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As previously noted, Widerøe’s business model is rather straightforward. The airline operates a fleet primarily composed of Dash 8 turboprops serving regional destinations in Norway. Norwegian believes that incorporating Widerøe’s capacity into its system will have a positive effect on the rest of its network. For example, a passenger from Brønnøysund can depart on a Dash 8 and connect on one of their 737s to other destinations.

«The air travel market is substantial and holds great importance for Norwegian consumers. Effective competition is essential to ensure that Norwegian air travelers can access the best possible deals at competitive prices. Further analysis is required to understand how Norwegian’s acquisition of Widerøe will influence competition in this market.» These words are from Gjermund Nese, the Director of the Competition Authority of Norway.

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On the other hand, project manager Katrine Amdam stated that «our preliminary assessment suggests there is cause for concern regarding the potential negative impact on Norwegian air passengers as a result of this acquisition. In the future, the Authority will conduct a more thorough examination to determine if the acquisition should be prohibited».

According to the law, the government must now publish a new assessment before November 17. At that point, it will have two options: approve the acquisition, or state that there are grounds for its prohibition.