IAG acquires 4.61% stake in Norwegian in 'attractive investment'

Norwegian has been plugging efforts into low-cost long-haul

International Airline Groups (IAG), the owner of Aer Lingus and British Airways, has acquired a 4.6pc ownership position in low-priced carrier Norwegian.

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

The minority investment, in a company IAG considers "attractive", is meant to establish a position from which IAG will start discussions with Norwegian Air which would include the possibility of a full offer.

Shares in Norwegian, which has been in trouble following a rapid expansion in recent years, rose by 25 per cent in Oslo on the announcement. It added Aer Lingus and the Spanish budget airline Vueling to its portfolio in 2015.

Bjorn Kjos, the CEO and founder of Norwegian, said earlier this month that "everybody in Europe" have wanted to acquire his airline. Also, the carrier states that "Norwegian has not been in any discussions or dialogue of IAG about the matter".

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Norwegian Air Shuttle has rocked the long-haul market with offers like US$140 tickets from Edinburgh to NY. The airline did not immediately comment on the IAG plans.

IAG is considering Norwegian Air Shuttle ASA as an "attractive investment", but reaffirms that no talks for a takeover had been conducted, and there is no absolute certainty that the holding will pursue a full acquisition.

And of course, Norwegian seized the opportunity to reassure its shareholders saying that "the interest of one of the largest worldwide aviation groups demonstrates the sustainability and potential of our business model and global growth".

In 2017, Norwegian had revenues of 31bn Norwegian krone (£2.8bn) and made a 298m krone loss on the 33m passengers it flew.

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