Less than three years after having been forced to file for bankruptcy, Norwegian is pressing ahead with another transformative move by announcing the acquisition of regional carrier Widerøe.

Norwegian will pay NOK1.125 billion ($105 million) to Widerøe’s owner WF Holding as part of the agreement. Both based in Norway, the two airlines will remain separate entities with their own air operator certificates (AOC), separate bases and management teams. There will be no change for employees either, the two airlines stated.

The acquisition price at closing will depend on Widerøe’s financial performance in 2023, among other factors, according to a Norwegian statement.

Norwegian and Widerøe decided to forge a deep commercial alliance in 2022. The two CEOs, Geir Karlsen at Norwegian and Stein Nielsen at Widerøe, are known to be close. Nielsen has expressed his admiration for the new, more reasonable path that Norwegian has taken under Karlsen’s leadership as the carrier moved on from its transatlantic ambitions.

The Widerøe takeover reinforces Norwegian’s fundamental shift from a low-cost airline operating an extensive domestic, European and long-haul network to a carrier pursuing intra-Norwegian and Norway-Europe traffic flows. Norwegian currently has around 300 European routes, among them 22 inside Norway. Widerøe operates on 85 Norwegian routes and has a market share of 20%.

“This is a milestone in Norwegian aviation history. Our two airlines have existed side by side for many years and no one knows the aviation market in Norway better. With this transaction, we will now create a streamlined and more comprehensive offer for all customers, and we look forward to offering seamless travel across our entire route networks,” Karlsen said July 6.

“Widerøe has a close to 90-year history, and we are the guarantor of a well-functioning route network in regional Norway,” Nielsen said. “Although we have a solid footprint in Norway, we are smaller in an international context. The tax level for air travel in Norway is particularly high, and this, in combination with fierce international competition, makes it difficult for a smaller regional airline to persevere without a strong partner.”

The regional carrier operates a dense network made up of mostly very short routes along Norway’s coast connecting remote towns largely on the basis of public service obligation (PSO) agreements with the Norwegian government. The state issued its latest invitation for tenders in April 2023 for a four-year period starting in April 2024. According to a regulatory filing, the government has decided to increase the minimum seat capacity and lower the maximum fare that can be charged to improve the offering to even small markets. Widerøe did not reveal further details.

The two airlines pointed out that there is overlap only on five domestic routes.

Widerøe currently operates a fleet of 48 aircraft. Among them are 45 Dash 8-100/200/300/400 turboprops. The 26 -100/200s have 39 seats, the four -300s have 50 seats and the 15 -400s have 78 seats.

Widerøe also operates three Embraer E190-E2s, the future of which now looks shaky given that the E2s are flown on some of the more mainline routes that overlap with Norwegian, as well as some secondary international services.

Norwegian operates 81 Boeing 737s, a mix of NGs and MAXs. After having canceled earlier orders for large numbers of 737 MAX and Airbus A320neo-family aircraft as the coronavirus pandemic unfolded in 2020, the carrier came back to the market in 2022 and ordered 50 737-8s. The aircraft will be delivered over 2025-28 and will be used partly for growth but also to replace older 737-800s. Norwegian also holds options for a further 30 737-8s that would be delivered from 2028 to 2030.

The airline has had a tumultuous history, but now partially goes back to its roots as a regional operator. Norwegian had been set up in 1993 as a regional carrier operating a fleet of Fokker 50s from a base in Bergen, Norway’s second city.

In 2002, it began its transformation into a low-cost airline, initially only focused on European routes. It later expanded to include long-haul services and added a fleet of 787s. The long-haul flying proved to be financially disastrous for the airline, in part because of operational issues around the 787s, but also because Norwegian never received the Russian overflight rights it needed to expand into Asia.

Well before the pandemic, the airline began to wind down the long-haul operation, and founder Bjoern Kjos stepped down from his CEO position in 2019. Long-haul flying finally ended in 2021.

Norwegian was forced to file for bankruptcy in November 2020 and emerged from that process in May 2021 with a less expansive strategy. It posted a NOK1.5 billion operating profit in 2022.