Airline may be sold to IAG

Airline may be sold to IAG

Norwegian Air could be sold to IAG or another bidder if the price is right, but offers made so far have been too low, according to the budget carrier’s top office holders.

Norwegian last week said it had rejected two takeover proposals from Aer Lingus-owner IAG.

“At the right price, anything is for sale,” founder and chief executive Bjorn Kjos said at Norwegian’s annual shareholders’ meeting.

Chairman Bjorn Kise said the bids indicated by IAG were too low to be recommended to shareholders.

Norwegian remains confident of its business model, Mr Kjos told shareholders.

IAG, which owns British Airways, Iberia, and Vueling, in addition to Aer Lingus, last month took a 4.6% stake in the airline.

“Acquisition interest from several parties confirms the sustainability of the business model,” said Mr Kjos told the shareholder meeting.

Loss-making Norwegian is in the midst of a massive transatlantic expansion aimed at turning around the company’s fortunes by replicating the low-cost model that worked for European flights.

Analysts on average expect the airline’s revenue to grow by 84% between 2017 and 2020 to £5.2bn (€5.93bn), according to forecasts on Thomson Reuters Eikon.

While the company is expected to post a net loss of €67m in the current year, the analysts forecast a profit of €74.7m in 2019 and €124m the following year.

Norwegian recently scrapped its winter route from Cork and Shannon to Providence in Rhode Island but has shaken up rivals on the transatlantic, as well as poaching pilots from Ryanair in recent times.

However, the viability of its business model has been called into question by other analysts because of mounting costs.

IAG boss Willie Walsh told analysts his firm would “look at all of our options in relation to Norwegian” following the rebuffed bid, but said Norwegian could not continue its current growth programme as a standalone business.

Potential IAG plans to gobble up Norwegian is bad news for Ireland’s consumers less than three years after the Government sold its 25% stake in the Irish airline, the Consumers’ Association of Ireland said recently.

Dermott Jewell said it is the first clear example of the way the takeovers in huge industries like the airlines will lower competition while consumers are left on the sidelines as “powerless” observers because transatlantic fares will inevitably rise.

Reuters and Irish Examiner

More in this Section

Tech firm Horizon8 picks Cork as Europe HQTech firm Horizon8 picks Cork as Europe HQ

Abbey eyes more Irish work as profits fallAbbey eyes more Irish work as profits fall

Providence shares see bounce on Tony O’Reilly exitProvidence shares see bounce on Tony O’Reilly exit

Legislation to test self-driving cars on Irish roads approvedLegislation to test self-driving cars on Irish roads approved


This Christmas remember that there is no such thing as cheap food.Buy local: Use your LOAF

As we wait, eager and giddy, a collective shudder of agitated ardor ripples through the theatre, like a Late, Late Toyshow audience when they KNOW Ryan’s going to give them another €150 voucher. Suddenly, a voice booms from the stage. Everyone erupts, whooping and cheering. And that was just for the safety announcement.Everyman's outstanding Jack and the Beanstalk ticks all panto boxes

Every band needs a Bez. In fact, there’s a case to be made that every workplace in the country could do with the Happy Mondays’ vibes man. Somebody to jump up with a pair of maracas and shake up the energy when things begin to flag.Happy Mondays create cheery Tuesday in Cork gig

More From The Irish Examiner