Transport

Norwegian Air receives ‘several inquiries’ after IAG interest

Airline has reported a larger first-quarter loss on Thursday following ‘low season’

Norwegian Air CEO Bjorn Kjos. The firm’s losses before interest and taxes deepened by 31 per cent to €228 million

Thu Apr 26 2018 - 09:17

Budget airline Norwegian Air said on Thursday it had received "several inquiries" in the wake of the advance by British Airways-owner IAG, as it reported a larger first-quarter loss on Thursday.

Before the news of IAG’s interest, Norwegian Air had warned of a bigger loss to cope with higher fuel costs.

“Norwegian has received several inquiries following IAG Group’s announcement of its acquisition of 4.6 per cent of the shares in the company,” Norwegian said in a statement.

“The Norwegian board of directors has established a steering committee and engaged financial and judicial advisers to review the situation, handle relevant inquiries and to safeguard the interests of all shareholders.”

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Transatlantic expansion

The firm’s losses before interest and taxes deepened by 31 per cent to 2.2 billion crowns (€228 million) year-on-year, while its revenues grew by a third over the same period to 7 billion crowns (€722 million).

Norwegian Air raised 1.3 billion crowns (€134 million) in a share issue to help fund its transatlantic expansion, a still unproven bet on whether a budget airline can replicate the model that worked for European flights.

Shares in Norwegian Air are up 48 per cent since the start of the year thanks to IAG’s interest in bidding for the company.

Norwegian reiterated its outlook.

An analyst with Davy said the loss during the “low season” first quarter was “expected”.

In terms of the inquiries following IAG’s approach, the analyst said that although they may not be as serious, they could “drive IAG’s acquisition price higher”.

On the conference call, management suggested that this meant other parties had got in touch regarding the company.

– Reuters

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