GRAHAM HISCOTT

The owner of British Airways could be lining-up a dramatic long-haul price war.

International Airlines Group yesterday confirmed it had bought a 4.6% stake in no-frills rival Norwegian, and said a full takeover was a “possibility”.

The shock move comes only weeks after IAG launched budget long-haul airline Level. Norwegian, founded by former fighter jet pilot Bjorn Kjos, has shaken up the market with cheap-aschips flights to the US, South America and Singapore from just £99 one way.

IAG already owns budget short-haul carrier Vueling.

Norwegian carries 5.8 million UK passengers each year from London Gatwick, Edinburgh and Manchester airports to 50 destinations worldwide.

But its rapid expansion has come at a cost, with the airline racking up losses and debts. Shares in the Oslo-based firm, valued at £640million, rocketed nearly 50% on the back of the news.