IAG, the parent company of British Airways, issued a statement to the Stock Exchange on Thursday morning.
Short and sweet, it says:
“UPDATE ON NORWEGIAN AIR SHUTTLE ASA
International Airlines Group (IAG) confirms that it does not intend to make an offer for Norwegian Air Shuttle ASA (Norwegian) and that, in due course, it will be selling its 3.93 per cent shareholding in Norwegian.”
And that’s it.
This was the original announcement back in April 2018:
“International Airlines Group (IAG) notes the recent press speculation that it is considering making an offer for Norwegian Air Shuttle ASA (Norwegian).
IAG considers Norwegian to be an attractive investment and has acquired a 4.61 per cent ownership position in the airline (minority investment).
The minority investment is intended to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer for Norwegian.
IAG confirms that no such discussions have taken place to date, that it has taken no decision to make an offer at this time and that there is no certainty that any such decision will be made.
A further announcement will be made if appropriate.”
It was believed that IAG followed up on this by submitting a series of bids to buy the entire airline, all of which were rejected by management. Norwegian stated that other airlines had also expressed an interest.
No deal was ever agreed. Then, as we wrote in late December, Norwegian announced a series of measures to avoid breaking its banking covenants on 31st December.
One Boeing 787 has been refinanced, raising $30m in cash (although of course long-term debt is increased by $30m)
A new cost-saving programme has been launched – no details yet – which is expected to save NOK 2bn in 2019. This will include closing unprofitable routes.
An “agreement” has been reached with Rolls-Royce over compensation for the Boeing 787 engine issues which have blighted Norwegian’s performance. However this is paid – either in cash or in kind – it will have an impact from the start of 2019.
Financing has been secured for all aircraft delivered due in H1 2019
Talks are continuing over the sale of some or all of its wholly owned aircraft
None of this was going to help Norwegian in the long term – in fact, by pushing up its long term debt it will make life tougher down the line – but it got it over the next bump in the road. The hope will be that falling oil prices and the maturing of existing routes will improve revenues in the medium term.
As for IAG …. there was no chance of buying Norwegian without the approval of the 72-year old CEO, Bjorn Kjos, who has a 27% shareholding. The Norwegian state investment fund has a further 9.9% and may well have voted tactically.
IAG may also have decided that, with its own in-house low cost carrier LEVEL performing well and Norwegian withdrawing from the Gatwick – Singapore route, the threat it posed was containable. Only time will tell if IAG was right.
How to earn Avios from UK credit cards (September 2023)
As a reminder, there are various ways of earning Avios points from UK credit cards. Many cards also have generous sign-up bonuses!
In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.
You qualify for the bonus on these cards even if you have a British Airways American Express card:
There are two official British Airways American Express cards with attractive sign-up bonuses:
You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points.
Run your own business?
We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,500 Avios.
You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus.
EDIT: Applications for this card are temporarily suspended due to IT issues with the British Airways On Business SME loyalty scheme.
There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.
Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.