British Airways owner bails out of Norwegian

IAG is to sell its stake in Norwegian

IAG is to sell its stake in Norwegian

The aviation holding IAG, which owns carriers such as British Airways, Iberia, Vueling, and Aer Lingus, announced that it had withdrawn from the shareholders of Norwegian Air. It is the third largest low-cost carrier in Europe behind easyJet and Ryanair and the ninth-largest low-cost airline in the world, the largest airline in Scandinavia, and the eighth-largest airline in Europe in terms of passenger numbers.

Shares in Norwegian dropped 20 percent after IAG's statement, while shares in IAG rose.

"Norwegian's finances are already under pressure, and a share sale (by IAG) will put pressure on the stock, making it hard for them to raise money", analyst Per Hansen of brokerage Nordnet said in a note to clients.

In response to IAG's news, chairman of the Norwegian board, Bjørn Kise, said: "We have been made aware of IAG's intentions to sell its shares in Norwegian Air Shuttle ASA".

Norwegian has shaken up long-haul rivals by offering cut-price transatlantic fares.

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However the company rejected two offers from IAG in May a year ago, saying they undervalue the company.

"I'm not getting into a bidding war", IAG's CEO continued, as quoted by the newspaper. "I think Norwegian in some form will continue". The airline group already took an interest of nearly 4 percent in Norwegian Air.

But he said that offer is both time and price limited.

The London-listed company, which also owns Aer Lingus and budged airlines Vueling and Level, took up a 4.61-percent ownership position in Norwegian in April previous year, saying at the time that it considered the low-priced transatlantic carrier to be an attractive investment. IAG also owns British Airways. Norwegian's plans and strategy remain unchanged.

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