There may be grounds to prohibit Norwegian’s acquisition of Widerøe

The Norwegian Competition Authority is still concerned that competition in the market for air travel may be impaired if Norwegian is permitted to acquire Widerøe. The Authority is therefore considering prohibiting the acquisition. 

On 15 September, the Norwegian Competition Authority announced that further analysis of how Norwegian’s acquisition of Widerøe will affect competition was needed. The Authority has since gathered and analyzed additional information from the companies concerned and other stakeholders in the market.  

The Authority’s assessment is that competition in the market for air travel may become significantly impeded as a result of the acquisition. This may lead to higher prices and fewer departures for airline passengers.  

– The market for air travel is a large and significant market for Norwegian consumers. The acquisition will result in a reduction from three to two players on several domestic routes. There is a risk that competition in the market may be impaired in a way that leads to increased prices and a reduced choice for Norwegian air passengers, says Director General Tina Søreide.  

The Norwegian Competition Authority is concerned that competition will weaken on the routes on which Norwegian and Widerøe are competing today. This is the case, amongst others, on the direct routes between Bergen and Stavanger, and between Bergen and Trondheim. This is also the case on several indirect connections between places in Norway where the parties provide competing flights with a stop-over in Oslo or Bergen.  

Today, the Norwegian Competition Authority has notified the parties in a statement of objections that there could be grounds for prohibiting the acquisition. This includes a detailed description of the Authority’s competition concerns and is based on a preliminary assessment of all the evidence on the file.  

– Competition may be weakened in three different ways. With only two market players, it may become easier for the parties to coordinate prices on domestic flights. Moreover, competition may be impeded on routes where the two parties are competitors prior to the transaction. Lastly, there is a risk that airlines competing with the parties will be faced with higher prices for ground handling services on the airports in Evenes, Alta and Kirkenes, says Project Manager Katrine Amdam.  

Norwegian has proposed remedies related to ground services. Since this proposal does not address all the competition concerns the Authority has identified, it has not been considered adequate at this stage.  

The deadline for Norwegian and Widerøe to submit their comments to the Authority’s statement of objections is 8 December.  

The deadline for the adoption of a final decision is 3 January 2024.