British Airways owner contemplates Norwegian bid

Boeing 737 800 Norwegian Air

A Norwegian Air Boeing 737-800. Norwegian Air

IAG, the parent company of British Airways, Iberia, Aer Lingus, Vueling and Level, is contemplating making a purchase offer on discount transatlantic carrier Norwegian Air Shuttle.

In its communiqué, IAG points out that "Norwegian is an attractive investment" and announces that it has acquired a "minority investment" of 4.61% in that company, "destined to establish a position from which to start conversations with Norwegian, Including possibility of formulating an offer of acquisition on whole "of airline".

IAG says no official discussions have taken place, and the company emphasized that it hasn't decided whether it will make an offer.

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".

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However, Norwegian said it had no prior knowledge of the minority acquisition by IAG.

Norwegian also released a statement, saying: "IAG's interest in the company confirms the sustainability and potential of our business model and global growth".

The firm has had a major impact on the long-haul market in Europe, undercutting rivals on trans-Atlantic ticket prices. Norwegian offers 17 weekly frequencies (34 flights, 17 per direction), between Barcelona and USA destinations of Los Angeles, San Francisco, New York and Miami, while Level maintains routes from El prat to San Francisco, Buenos Aires, Punta Cana and Boston.

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

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Adding Norwegian's short-haul operations in Europe to Vueling would create a budget carrier better placed to compete against the continent's two biggest low-priced airlines Ryanair and easyJet.

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.

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

EasyJet was up 2%, Ryanair up 1.7% Wizz Air 3% after IAG confirmed its position with Norwegian, however.

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