British Airways owner IAG weighs takeover offer for Norwegian Air

Dianna Christensen
April 13, 2018

IAG's shares were down 0.6 percent in London in a broadly flat market.

IAG said on Thursday (April 12) it had bought a 4.61% stake in Norwegian as a platform for starting talks, and that could lead to it making a full offer for the airline founded by former fighter pilot Bjorn Kjos.

It said "no such discussions have taken place to date" and that "no decision" had been taken to make an offer, adding that "there is no certainty that any such decision will be made". The company said it had "no prior knowledge of this acquisition" and "has not been in any discussions or dialogue with IAG about the matter".

The budget airline is trying to crack the transatlantic market by undercutting established rivals but faces pressures to control costs and shore up its balance sheet.

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

Fierce competition between two airlines low cost long radio flights is focused on El prat airport in Barcelona.

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.

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In low-priced national and European routes, it is Vueling that rivals Norwegian.

Shares in Norwegian, a stock which this year has been pounded over worries about its profitability, surged 37% on the news.

Should IAG go ahead with the plan, the deal could be transformative for both companies, as well as the European air transport sector.

In 2012 acquired British BMI, a year later was made with Spanish Vueling and in 2015 incorporated Irish Air Lingus.

IAG closed 2017 exercise with a total revenue of 22,972,000,000 euros ( 1.8%).

IAG's Aer Lingus reported a 2.8 percent increase in revenue tonne-kilometers for the first three months of 2018 compared to the same period previous year as British Airways reported a 2.0 percent drop and Iberia traffic rose 4.7 percent in the period.

Other reports by GlobalViralNews

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