Airline Norwegian announces takeover of regional operator Widerøe
Norwegian will buy fellow airline Widerøe for 1.1 billion kroner, the company said in a stock exchange announcement Thursday.
Norwegian Air Shuttle will buy Wideroe for 1.13 billion kroner as the airline looks to strengthen its position domestically.
The two companies had been collaborating on routes since last year and will continue to operate independently, but the networks will be more closely integrated, Norwegian CEO Geir Karlsen said.
He added the deal would make both airlines more attractive to passengers.
Widerøe is Scandinavia’s largest regional only airline and primarily offers short-haul flights across Norway with some European destinations. Widerøe serves more than 40 small and medium sized airports across Norway in rural, northern and fjord regions.
The deal comes only two years after Norwegian Air emerged from bankruptcy protection, with its fleet increasing in the years following its financial troubles.
Frode Steen, an economics professor at the Norwegian School of Economics, told public broadcaster NRK that the takeover could lead to a better offer for passengers.
“On domestic flights, this can lead to a better offer. It will be a much more integrated offer with through journeys. If you search on Norwegian, you can also get Widerøe's destinations,” he said.
Thomas Iverson, senior legal advisor from the Norwegian Consumer Council, said that the takeover could lead to route closures or higher prices through a lack of competition.
“But when it comes to the offer in general, we have to expect that some routes will either be merged or closed down in the long term,” he told NRK.
“Absence of competition, or reduced competition, always carries with it the risk that the offer will be worse. In the same way, it is also rarely positive for the prices that the competition is lower. It is difficult to predict, but it will take a lot for it to be cheaper, in any case,” he added.
The deal is still subject to approval from the Norwegian Competition Authority. Widerøe will maintain its existing agreement with other airlines, with its loyalty system being integrated into Norwegian's.
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Norwegian Air Shuttle will buy Wideroe for 1.13 billion kroner as the airline looks to strengthen its position domestically.
The two companies had been collaborating on routes since last year and will continue to operate independently, but the networks will be more closely integrated, Norwegian CEO Geir Karlsen said.
He added the deal would make both airlines more attractive to passengers.
Widerøe is Scandinavia’s largest regional only airline and primarily offers short-haul flights across Norway with some European destinations. Widerøe serves more than 40 small and medium sized airports across Norway in rural, northern and fjord regions.
The deal comes only two years after Norwegian Air emerged from bankruptcy protection, with its fleet increasing in the years following its financial troubles.
Frode Steen, an economics professor at the Norwegian School of Economics, told public broadcaster NRK that the takeover could lead to a better offer for passengers.
“On domestic flights, this can lead to a better offer. It will be a much more integrated offer with through journeys. If you search on Norwegian, you can also get Widerøe's destinations,” he said.
Thomas Iverson, senior legal advisor from the Norwegian Consumer Council, said that the takeover could lead to route closures or higher prices through a lack of competition.
“But when it comes to the offer in general, we have to expect that some routes will either be merged or closed down in the long term,” he told NRK.
“Absence of competition, or reduced competition, always carries with it the risk that the offer will be worse. In the same way, it is also rarely positive for the prices that the competition is lower. It is difficult to predict, but it will take a lot for it to be cheaper, in any case,” he added.
The deal is still subject to approval from the Norwegian Competition Authority. Widerøe will maintain its existing agreement with other airlines, with its loyalty system being integrated into Norwegian's.
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