Norway’s competition watchdog wants more time to review Norwegian’s acquisition of counterpart Widerøe, expressing fears that the deal could impede competition.

Norwegian reached an agreement in July to buy WF Holding, the owner of Widerøe, for NOK1.125 billion ($104.5 million). At the time, Norwegian CEO Geir Karlsen described the move as a “milestone in Norwegian aviation history.”

Initially, the Norwegian Competition Authority had set a deadline of Sept. 15 to present a preliminary assessment of the acquisition. However, the government agency has decided to extend the deadline by two months, pushing it to Nov. 17, with a final deadline of Jan. 3, 2024.

“Our preliminary assessment is that there may be reason to fear that the acquisition will impact Norwegian air passengers negatively,” says Katrine Amdam, project manager at the authority. “Going forward, the competition authority will more thoroughly consider the case to find out if the acquisition should be prohibited.”

The proposed deal is expected to create a stronger challenger to rival SAS Scandinavian Airlines, as it will expand Norwegian’s presence in regional Norway. Additionally, it is anticipated to increase Norwegian’s market share in the business segment and reduce the seasonality of its operations.

Karlsen says the airline understands that the Norwegian Competition Authority requires more time to review the transaction, but expressed confidence that the acquisition will receive approval.

“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,” he says. “We strongly believe in a positive outcome in this matter.”

According to OAG Schedules Analyser data, SAS is the largest operator in Norway’s domestic market, with a 39.1% capacity share during September 2023. Norwegian is the second largest with 35%, followed by Widerøe with 24.7%.

Norwegian’s domestic network spans 17 routes this month, most of which touch Oslo Gardermoen Airport, as well as to hubs used by Widerøe, such as Bergen, Trondheim, Bodø and Tromsø. Widerøe, meanwhile, provides 77 domestic routes this month, connecting smaller northern and fjord communities. Many routes are via public service obligation agreements with the Norwegian government.