Norway’s competition authority (Konkurransetilsynet) needs more time to analyse the planned acquisition by Norwegian of rival carrier Widerøe (WF, Bodø) as “there may be a danger that competition in the Norwegian aviation market will be weakened” if the deal goes ahead.

Norwegian announced in early July that it wanted to buy Widerøe. It then sent a formal notice on the matter to the authority, which had until September 15 to come up with an initial evaluation.

On that date, the competition regulator duly issued a statement saying it had “collected and analysed detailed information from the companies and other players in the market” and continued to have concerns.

“If competition is reduced in a way that leads to higher prices and worse offers for Norwegian air passengers, the Norwegian Competition Authority has the option to stop the acquisition,” it warned.

Given the considerable distances between the capital Oslo and the rest of the country, “the aviation market is a large and important one for Norwegian consumers,” Gjermund Nese, its director for finance and communications, explained in the statement. “Well-functioning competition is crucial for Norwegian air passengers to have the best possible offer at the lowest possible price. It is essential to carry out further analyses of how the purchase will affect competition in the market.”

As a result of deadlines in Norway’s Competition Act, the regulator must come up with a new assessment before November 17, when it either approves the acquisition or notifies the companies that it may be appropriate to stop it. The final deadline for the review is January 3, 2024. It added: “Our preliminary assessment is that there may be reason to fear that the acquisition is negative for passengers.”

Geir Karlsen, chief executive of Norwegian, said in a stock exchange filing that “we take note of today’s decision by the Norwegian Competition Authority to continue its review of the acquisition. [...] Having operated side by side for many years, we believe that by acquiring Widerøe we will be able to create a streamlined and more comprehensive offer for air travel across Norway and abroad. We strongly believe in a positive outcome in this matter.”

He elaborated in a press release that the two carriers “have very few overlapping routes and complement each other with different 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, with headquarters in Bodø, and will maintain existing agreements with other airlines. Based on the facts of the case, I am optimistic about a final outcome.”

Widerøe has not commented on the regulator’s preliminary assessment.