Norwegian Air CEO Says IAG Not Only Interested Party to Make Approach

   By Robert Wall 
 

LONDON--Scandinavian budget airline Norwegian Air Shuttle ASA (NAS.OS) said Thursday that it has received further expressions of interest after International Consolidated Airlines Group SA (IAG.LN) this month disclosed it had taken a stake and may seek a takeover.

International Consolidated Airlines Group, or IAG, "is not the only interested party that has approached us," Norwegian Air Chief Executive Bjorn Kjos said as the airline announced its first-quarter results.

The inquiries increased after IAG, the owner of British Airways, announced it had taken a 4.6% stake. Norwegian Air said its board has set up a steering committee to work with outside hired help "to review the situation, handle relevant inquiries and to safeguard the interests of all shareholders."

Shares in Norwegian Air surged more than 10% Thursday after the additional interest became known.

IAG said this month it took its stake "to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer for Norwegian." No formal takeover offer has been made.

Mr. Kjos said Norwegian Air is "happy to have IAG as an investor."

The Oslo-based budget carrier began flying trans-Atlantic routes in 2013, luring passengers with cheap fares and new Boeing Co. (BA) 787 Dreamliner planes. It doubled down on the strategy last year, adding flights for as little as $65 to and from Europe and the U.S. using smaller single-aisle jets.

The airline flew about 3 million customers on long-haul flights last year and offers services to cities such as New York, Chicago and Los Angeles as well as secondary airports including Green Airport in Providence, R.I., and Austin, Texas. Mr. Kjos Thursday said the airline wasn't looking to add more U.S. destinations for the moment, though it would boost frequencies on some routes.

Norwegian Air's rapid expansion has come at a cost. The airline has taken on a mountain of debt, 22.3 billion Norwegian kroner ($2.84 billion) at the end of last year. Last month, the airline was forced to raise equity by almost a quarter of its total market valuation, and said it may sell some planes and its frequent-flyer program.

The airline said it was looking to divest older planes and some new ones that are not needed. They will likely be sold or spun off into a leasing business that could be run with partners, Mr. Kjos told analysts. Norwegian Air has already been approached about those planes, he said.

Write to Robert Wall at [e-mail]

(END) Dow Jones Newswires

April 26, 2018 03:57 ET (07:57 GMT)

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