The cash-strapped airline says the cash is necessary to maintain operations throughout the COVID-19 crisis.
“Norwegian has asked for financial support in the billions, and the government has considered that in this situation there is no sound use of community funds,” said industrial minister Iselin Nyboe, adding that such a move would distort competition.
The flag carrier said in August it would run out of cash in the first quarter of 2021 without extra funds, then it raised some additional equity and restructured debt, though analysts believe it needs more money to survive.
According to broker Peel Hunt, London-listed companies are expected to benefit from potential insolvency.
Norwegian has the greatest network overlap with British Airways owner IAG for short-haul operations in Spain and long-haul flights from the UK to North America.
“IAG may also be able to take on some of Norwegian's aircraft leases at very attractive rates to reduce the average age of its fleet and considerably improve fuel efficiency,” the Peel Hunt analysts commented.
“Wizz Air has entered the domestic Norwegian market recently and could benefit from improved yields due to the lack of competing capacity for a period, with Braathen's new airline not due to launch until 2021.”
Shares in Wizz Air and Ryanair jumped 5% to 3,842p and €14, respectively, while IAG and easyJet surged 4% to 107.6p and 554.6p respectively on Monday late morning.