British Airways' owner to buy budget airline Norwegian?

Randall Padilla
April 13, 2018

"IAG considers Norwegian to be an attractive investment and has acquired a 4.61 percent ownership position in the airline", said the group that includes British Airways and Ireland's Aer Lingus, as well as Spanish airlines Iberia and Vueling.

However, IAG clarifies that to date "has not had discussions for this possible operation, has not made any decision on formulation of an offer of acquisition at this time and that re is no certainty as to wher such a decision will be made".

Shares in Norwegian Air - which is reportedly worth $1.2bn (£845m) - soared by 37% following Thursday's announcement.

"Norwegian believes that interest from one of the largest worldwide aviation groups demonstrates the sustainability and potential of our business model and global growth", it said.

The firm has had a major impact on the long-haul market in Europe, undercutting rivals on trans-Atlantic ticket prices.

Norwegian carries almost 6 million United Kingdom passengers annually from airports in London, Edinburgh and Manchester, England, to 50 destinations worldwide, and has been bolstering its long-haul flights to the USA since it introduced them in 2014. In fact, IAG launched Level in June of a year ago to face Norwegian airline in market for low-priced long-radio flights.

Also, the carrier states that "Norwegian has not been in any discussions or dialogue of IAG about the matter".

British Airways' parent company said Thursday it is considering making an offer for the low-priced carrier.

"If there is no imminent bid for Norwegian, IAG is just the first vulture to have landed that would like a say in how Norwegian's long-distance fleet.is dismantled and sold", Norne analyst Karl Johan Molnes said.

Ryanair last month agreed to buy a majority stake in a new Austrian leisure airline founded by Formula One former champion Niki Lauda, while easyJet bought a parts of failed airline Air Berlin past year.

IAG's interest in Norwegian would see a wave of consolidation in European air travel which started a year ago extend its reach to long-haul travel.

Other reports by AllAboutTopnews

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