Published: Thu, April 12, 2018
Money | By Armando Alvarado

IAG takes stake in Norwegian

IAG takes stake in Norwegian

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. International Airlines Group S.A. said it "considers Norwegian to be an attractive investment and has acquired a 4.61% ownership position in the airline".

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

Norwegian Air Shuttle
GETTYNorwegian Air Shuttle has a reputation for cut-price flights

But IAG stresses that no talks have taken place with Norwegian and that it has not made any decision on making an offer. IAG would become an even bigger player not only in traditional hub flying, but also in the fast-growing European low-fare segment. The airline did not immediately comment on the IAG plans.

Norwegian has been making a charge into the low-priced, long-haul market, looking to tap into the lucrative potential of transatlantic routes, but has been battling rising fuel prices with question marks raised by analysts over whether it was growing too fast too quickly. Ryanair's CEO Michael O'Leary has said he has no plans to expand Ryanair's operations across the Atlantic but the airline has been in talks with Norwegian about a possible partnership that would see Ryanair piggyback on Norwegian's long-haul routes. It has holding an extraordinary shareholder meeting on April 13 because of a recent financing round.

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