IAG considering bid for budget carrier Norwegian

IAG considering bid for budget carrier Norwegian

IAG considering bid for budget carrier Norwegian

British Airways parent company International Airlines Group (IAG) is considering buying budget air carrier Norwegian Air Shuttle, in which it recently acquired a 4.6% stake, to increase its presence in the low-priced market.

The statement indicates that the company bought an ownership position of 4.61 percent, which allows IAG to initiate discussions with Norwegian, "including the possibility of a full offer" for the Nordic carrier.

Responding on twitter today Norwegian said: "Just been made aware that the International Airline Group (IAG) has acquired 4.6 percent of the shares in Norwegian Air Shuttle ASA".

"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 owner of British Airways is eyeing a takeover of its budget rival Norwegian amid a mounting price war on key long-haul routes.

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 past year as British Airways reported a 2.0 percent drop and Iberia traffic rose 4.7 percent in the period.

"Willie Walsh has always been interested in the low-priced long haul concept, long before the creation of Level".

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

Norwegian Air Shuttle
GETTYNorwegian Air Shuttle has a reputation for cut-price flights

Norwegian's shares were halted by the Oslo bourse but had earlier risen by 18.3 percent to 212.1 crowns, valuing the company at 8.06 billion Norwegian crowns ($1.04 billion).

On Monday March 12 Norwegian's stock was trading at US$22.51.

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

There will be no buying Norwegian on the cheap, however, said SEB analyst Jo Erlend Korsvold.

Kjos was not available for comment when contacted by Reuters.

Last month Aer Lingus launched its 14th transatlantic route with service between Dublin and Philadelphia that will be followed by a new Seattle link next month.

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

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