Norwegian Air shares soar despite IAG denying bid
Shares in carrier Norwegian Air climbed after the Aer Lingus and British Airways owner IAG denied a Spanish media report it was preparing another offer for the airline.
The shares surged almost 6.5% in Oslo after rising as much as 12% at the opening of trading. “We have said that we are no longer interested in Norwegian several times in the last few months. Nothing has changed,” an IAG spokeswoman said.
Spanish news website OKdiario had reported that IAG would make an offer for Norwegian within a fortnight, citing anonymous sources. IAG also owns Iberia and Vueling airlines.
IAG said in January that it would not bid for Norwegian and planned to sell its stake of around 3.9% in the company. Norwegian subsequently raised 3bn Norwegian crowns (€311m) to shore up its finances.
Norwegian has shaken up rivals by offering cut-price transatlantic fares, but its rapid expansion has left it with hefty losses and high debts.
In Ireland, Norwegian had initially big plans to take on Aer Lingus and British Airways in transatlantic flights from Cork and Shannon. But it was also hit hard by the ban on flights of the Boeing 737 Max, an aircraft Norwegian used extensively, and which led it to cancelling many flights out of Ireland this summer.
“We do not think that in Norwegian’s current state the debt-ridden airline can hope for a white knight - it will have to try and survive on its own,” broker Bernstein said in a note to clients, which also noted IAG’s denial of an offer.
Shares in Norwegian Air have slumped almost 69% in the past year to value the company at €578m, while IAG shares have fallen 22% in the past year to value it around €10bn.
- Reuters and Irish Examiner
