Saturday, 23 March, 2019

IAG buys 4.6% stake in Norwegian airlines

12 Apr 2018, 20:49 ( 11 Months ago) | updated: 12 Apr 2018, 20:51 ( 11 Months ago)

DF-Xinhua Report
DF File Photo.

International Airlines Group, IAG, announced on Thursday it acquired a 4.61 percent stake in Norway's low-cost carrier Norwegian.

   According to a statement, IAG, which includes Spain's Iberia and Vueling, Britain's British Airways and Ireland's Aer Lingus, considers that Norwegian is an attractive investment and plans to make a full offer.

   This initial investment is "intended to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer," IAG said, although these discussions have not taken place yet.

   The group explained that it is simply a strategic operation and that at the moment, no decision has been taken regarding the final purchase.

   Following this announcement, Norwegian shares rose by more than 20 percent on the stock exchange, local media reported.

   "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," the aeronautical holding company said.

   Norwegian, meanwhile, stressed that they had no knowledge about the operation before it was announced this morning.

   However, they said that the IAG movement confirms "the sustainability and potential of our business model and global growth".

   The Scandinavian airline has seen significant growth in Spain due to its policy of long-range flights at low prices.

   According to data from the Spanish Airports and Air Navigation (AENA), Norwegian was the eighth most used airline in the first quarter of 2018, growing by 6.6 percent when compared with the same period of last year.

   The company launched an ambitious strategy of long-range flights at low prices with weekly departures to some U.S. destinations: Los Angeles, San Francisco, New York and Miami.

   However, this strategy of expansion meant losses of 30 million euros (36.9 million U.S. dollars) last year, according to the Spanish press.