BA mulls third Norwegian bid
THE owner of British Airways is considering whether to make a third approach for Norwegian Air Shuttle after being knocked back twice by the fast-growing budget airline.
FTSE 100 group IAG, which also owns Spanish airline Iberia and Irish carrier Aer Lingus, made its moves after buying a 4.61 per cent stake last month.
Norwegian said that its board had “unanimously rejected” two separate conditional proposals as undervaluing the business and its prospects. Its shares fell by 10 per cent.
IAG chief executive Willie Walsh said: “We have had contact with their board which has not been successful and we are reviewing our options. We have not made any formal offer.”
Walsh also denied there were any other takeover targets on IAG’s radar at the moment.
He played down suggestions IAG would buy Norwegian to close down a business which has become a rival for transatlantic trade, adding: “We don’t buy airlines to take them out but to develop them. Just look at what we have done with Aer Lingus, which has significantly expanded on transatlantic.
“It is well known to people that I am a great admirer of what Norwegian has done and one of the reasons we started Level [IAG’s low-cost airline] was that they proved the model can work. They haven’t proved it can be a financial success. It is an opportunity which we intend to fully exploit.”
Norwegian, which carries 5.8 million passengers a year from Gatwick, Edinburgh and Manchester to 50 destinations worldwide, claims to have had serious expressions of interest from other potential buyers.
IAG is one of several airlines affected by problems with the latest Rolls-Royce jet engines which power Boeing Dreamliner 787 planes and Walsh said it would be seeking compensation.
He said: “I am very disappointed with their performance. When it works, it is a great engine and delivers in terms of fuel efficiency, but these issues are creating disruption to our network so we expect a number of 787s to be grounded in this quarter. We will see it continue into July.”
IAG shares rose 37½p to 678p as it lifted first-quarter profit by 75 per cent to €280million on 2.1 per cent higher revenue of just over €5billion as it benefited from the timing of Easter. Passenger numbers were up 8.5 per cent on the previous year at nearly 23 million.