IAG floats possible Norwegian takeover

Norwegian aircraft

British Airways parent International Airlines Group (IAG) has confirmed it is considering an acquisition of low-priced carrier Norwegian.

"IAG confirms that no such discussions have taken place to date, that it has taken no decision to make an offer at this time and that there is no certainty that any such decision will be made".

Norwegian shares rose by 40% in early trading upon the news.

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.

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

Norwegian is now the third-largest budget carrier in Europe and the eighth-largest in the world. In the long haul low-priced segment, both NAS and LEVEL started recently and the combination of both carriers and its short-haul counterparts could generate an interesting offering of connections for intercontinental travelers.

Here in Canada, Norwegian Air filed with the Canadian Transportation Agency to possibly start transatlantic flights from this market starting summer 2018, however on Tuesday it was reported that the airline has pushed back plans for a possible Canada launch until at least spring or summer 2019 due to aircraft delivery delays.

For months there has been talk of a possible LCC alliance between Ryanair and Norwegian.

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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