Norwegian Air CEO Says IAG Not Only Interested Party to Make Approach
April 26 2018 - 4:12AM
Dow Jones News
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 robert.wall@wsj.com
(END) Dow Jones Newswires
April 26, 2018 03:57 ET (07:57 GMT)
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