It seems that Norwegian Air Shuttle is back on the acquisition path after a hard few years, with plans to acquire Widerøe.
Norwegian has entered into an agreement with WF Holding AS to acquire Widerøe, the major regional carrier in Norway.
Widerøe will continue to exist as a separate company with its own brand, organisation and headquarters in Bodø.
According to Norweigan, linking Widerøe’s regional route network with Norwegian’s domestic and international routes thus secures a customer offering with better connectivity and seamless end-to-end experience.
Widerøe covers more than 40 small and medium-sized airports across Norway, in addition to a few larger airports in Europe, while Norwegian offers more than 300 routes to 114 destinations in the Nordics and in Europe.
Out of a total of 107 routes in Norway, out of which 85 are operated by Widerøe and 22 are operated by Norwegian, only five overlap and can all be operated with standard jet aircraft.
Acquisition
Norwegian will acquire Widerøe for a cash consideration of NOK 1,125 million (82 Million GBP/96 million Euro/104 Million USD). The purchase price is subject to certain adjustments after closing, including concerning the profitability of Widerøe in 2023.
In Quotes
Geir Karlsen, CEO of Norwegian.
“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,”
He adds
“The agreement will secure an even better customer offering for passengers in Norway. It will facilitate more efficient operations that lay the foundation for a strong Norwegian aviation industry with local employment and sound working conditions. This will open new opportunities for collaboration with the travel industry in Norway to promote tourism across the country. We will make sure that all passengers benefit from our extensive offering, including our attractive Norwegian Reward loyalty programme,”
Stein Nilsen, CEO of Widerøe said
“Widerøe has a close to 90-year history, and we are the guarantor of a well-functioning route network in regional Norway. 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. We are therefore very happy to now join forces with Norwegian, and we are excited to get an industrial owner that aspires to develop both companies further. We are convinced that this solution is in the best interest of Widerøe, our employees, and not the least our customers,”
A few hurdles to clear
Like any transaction and shrinkage of possible competition, it will require the regulatory review process from the Norwegian Competition Authorities to be completed.
Providing performance can be maintained and other hurdles are cleared, the transaction is expected to close by the end of the fourth quarter of 2023.
There appears to be some clear separation between the companies, with them both keeping separate management structures and bases.
We’ll have to see how that pans out in the longer term.
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