The owner of British Airways, International Airlines Group (IAG), has confirmed that it is looking into potentially acquiring Norwegian Air Shuttle, a low-cost airline. Reports suggest that IAG is interested in the acquisition to strengthen its position in the market, especially with the increasing competition from other budget carriers.
IAG has stated that it views Norwegian as an appealing investment. Their initial minority investment is meant to open up discussions with Norwegian, which could possibly lead to a full acquisition. However, Norwegian Air has declined to comment on the matter.
Acquiring Norwegian would significantly accelerate IAG’s efforts to expand in the low-cost, long-haul airline sector. IAG, which owns British Airways, has already been growing its budget airlines, Level and Aer Lingus, and has gained additional airport slots in Europe from the now-defunct U.K. airline, Monarch Airlines. In February, IAG anticipated better earnings for the year due to rising prices, decreasing costs, and an increase in capacity for its Level airline.
Norwegian Air’s CEO, Bjorn Kjos, mentioned recently that many companies in Europe were interested in buying Norwegian. However, he noted that the company is currently focused on investing in its fleet and isn’t considering selling until these investments begin to yield returns. Kjos added that bringing in other investors would only be an option if they decided to sell, which is not a priority at the moment.