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British Airways owner contemplates Norwegian bid

13 April, 2018, 01:29 | Author: Melinda Barton
  • Transatlantic flight record

Norwegian Air Shuttle has rocked the long-haul market with offers like US$140 tickets from Edinburgh to NY.

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

Fast-growing Norwegian was forced to raise new equity in March to help fund its expansion and cope with higher fuel costs after warning of a larger than expected loss in the current quarter.

IAG was formed from a merger of BA and Iberia, the Spanish flag carrier, in 2011 and has already grown over the past three years following a number of buy-outs.

A move for Norwegian underlines...

Norwegian is a listed company on the Oslo Stock Exchange and is the sixth largest low-priced airline in the world. In fact, IAG launched Level in June of a year ago to face Norwegian airline in market for low-priced long-radio flights.

Some of its most popular deals have included £69 flights to New York, Providence and Hartford in the United States, though it's cheapest at the moment is around £120.

Norwegian's shares, temporarily halted after the IAG news, rose as much as 39 percent to 250 crowns when they resumed trading, valuing the company at 9.5 billion Norwegian crowns ($1.22 billion).

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

The buy-up caught Norwegian by surprise.

The low-priced carrier's shares jumped as much as 45% on the news.

"Norwegian had no prior knowledge of this acquisition before it was reported by the media mid-morning Thursday", the carrier said in its own statement.

Kjos was not available for comment when contacted by Reuters.

Norwegian Air carries over 30 million passengers a year and last year struck an agreement so easyJet customers could access its long-haul routes.

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.



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