Norwegian fields further investor inquiries following IAG taking 4.6% stake

Norwegian fields further investor inquiries following IAG taking 4.6% stake

Norwegian today revealed that it has received “several inquiries” following British Airways’ owner IAG taking a 4.6% stake in the low cost carrier as a precursor for a possible takeover bid.

Europe’s third largest budget airline has established a steering committee and engaged financial and judicial advisors following IAG’s move two weeks ago.

They have been appointed “to review the situation, handle relevant inquiries and to safeguard the interests of all shareholders”.

The disclosure came as Norwegian reported a trimming of first quarter losses to NOK 46.2 million (£4.26 million) from NOK 1.5 billion in the same period a year earlier.

The result was positively affected by a financial gain from reclassification of a 17% stake in Norwegian banking group Norwegian Finans Holding of NOK 1.94 billion.

The airline also completed a private placement of NOK 450 million shares in the first quarter.

Norwegian carried 7.5 million passengers in the first quarter, a year-on-year increase of 12% as capacity rose by 36% and a load factor was 84.5% was achieved.

The carrier is in the process of divesting up to 140 aircraft, including future deliveries, by replacing older models as well as possible sales or transfers into a leasing structure.

It will also review strategic opportunities for the Norwegian Reward loyalty scheme.

Norwegian took delivery of six new Boeing 787-9 Dreamliners and two Boeing 737-800s in the quarter.

New routes were opened from Paris to Denver and Oakland/San Francisco, from Gatwick to Chicago and Austin, and Rome to Oakland. An interline agreement was also truck with Norway-based regional carrier Widerøe.

Looking forward, demand for travelling with Norwegian and advance bookings were described as “satisfactory” entering the second quarter of the year.

Chief executive Bjørn Kjos said: “In this quarter, we in particular see the effects of higher fuel costs. At the same time, we have doubled our fleet of Dreamliners and still manage to fill the aircraft, attracting more customers both in new and more established markets.

“Our long-haul operation is now well established, proving that customers want affordable fares on intercontinental routes.

Norwegian’s global growth strategy is expected to provide economies of scale and lower unit costs. During the first quarter, unit cost including depreciation and excluding fuel fell by 5%.

Kjos added: “Norwegian has been through a long period of strong growth which will reach its peak by the second quarter this year.

“Going forward, additional capital will boost competitiveness and protect existing and future investments in a market characterised by higher oil prices and fluctuating currencies.

“The co-operation with Widerøe has been well received in the market and the number of bookings continue to increase.”

Comments

This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travel Weekly.
By posting your comments you agree to accept our Terms & Conditions.

More in air