Airline Norwegian's takeover of Widerøe could be halted
The Norwegian Competition Authority could put a stop to the takeover of regional airline Widerøe by Norwegian as it fears competition could be weakened.
Norwegian announced this summer that it had agreed to buy Widerøe, which is Scandinavia's largest regional-only airline.
The 1.1 billion kroner deal could be blocked by the Norwegian Competition Authority, though. The reason is that a lack of competition could weaken the airline market.
This could have negative consequences for travellers.
"The aviation market is a large and important market for Norwegian consumers. Well-functioning competition is essential for Norwegian air passengers to have the best possible offer at the lowest possible price. It is necessary to carry out further analyses of how Norwegian's purchase of Widerøe will affect competition in the market," Gjermund Nese of the Norwegian Competition Authority said in a preliminary assessment of the takeover.
The supervisory authority said that it will make its final decision on the proposed takeover on November 17th.
Norwegian Airline remains positive that the authorities will give the takeover the green light.
"We strongly believe in a positive outcome in the case," Geir Karlsen, CEO of Norwegian, said in a stock market announcement.
Norwegian argues that SAS is actually a competitor of the Widerøe and not Norwegian. Its explanation is that SAS owns and leases planes which are of a similar size to Widerøe's smaller aircraft. Meanwhile, Norwegian says that its Boeing 737 are too large and unprofitable to fly to the airports that Widerøe serve.
Norwegian and Widerøe have been collaborating on routes since last year. Widerøe serves more than 40 small and medium-sized airports across Norway.
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Norwegian announced this summer that it had agreed to buy Widerøe, which is Scandinavia's largest regional-only airline.
The 1.1 billion kroner deal could be blocked by the Norwegian Competition Authority, though. The reason is that a lack of competition could weaken the airline market.
This could have negative consequences for travellers.
"The aviation market is a large and important market for Norwegian consumers. Well-functioning competition is essential for Norwegian air passengers to have the best possible offer at the lowest possible price. It is necessary to carry out further analyses of how Norwegian's purchase of Widerøe will affect competition in the market," Gjermund Nese of the Norwegian Competition Authority said in a preliminary assessment of the takeover.
The supervisory authority said that it will make its final decision on the proposed takeover on November 17th.
Norwegian Airline remains positive that the authorities will give the takeover the green light.
"We strongly believe in a positive outcome in the case," Geir Karlsen, CEO of Norwegian, said in a stock market announcement.
Norwegian argues that SAS is actually a competitor of the Widerøe and not Norwegian. Its explanation is that SAS owns and leases planes which are of a similar size to Widerøe's smaller aircraft. Meanwhile, Norwegian says that its Boeing 737 are too large and unprofitable to fly to the airports that Widerøe serve.
Norwegian and Widerøe have been collaborating on routes since last year. Widerøe serves more than 40 small and medium-sized airports across Norway.
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