BA invests in Norwegian

[Strategic Aviation]

Norwegian Plays Coy, Rejects Two IAG Bids Despite Clear Interest In Buyout - One Mile at a Time

Initially Norwegian management said that they had no interest in being acquired, though I think it goes without saying that every airline has a price. Today it has been announced that Norwegian has turned down two separate 100% takeover bids from IAG.

I think the conclusion here is inevitable — IAG has loads of cash, and Norwegian isn’t doing great financially. At this point it’s no longer a question of whether IAG will take over Norwegian, but rather it’s a matter of the price they’ll pay. I’d be shocked if this deal wasn’t finalized in the next few weeks (unless Norwegian plays hardball and strings them a long a bit longer, since they know they have leverage).

Once the deal is complete, the question will be what exactly IAG wants to do with Norwegian. They can:

• Continue operating Norwegian independently as a brand, given that it’s generally well liked, while making it complement British Airways, rather than compete with it
• Integrate Norwegian into LEVEL, so they get rid of Norwegian overnight and have planes to operate a new mega low cost carrier
• Simply take Norwegian planes and transfer them to British Airways (which seems most unlikely, since they’ll no doubt want to have planes they can operate on a lower cost basis, which isn’t happening if the planes fly directly with British Airways)

No matter how you slice it, this takeover would be terrible for consumers.

 

[Strategic Aviation]

Norwegian Air CEO Is Wait and See on Possible Sale as Competitors Show Interest - Skift

 

[MELso]

Speaking of Norwegian Air’s financial viability, it looks like they may be lurching into a liquidity crisis.

Norwegian Issues Statement on End-of-Year Shutdown Speculation

Something to be mindful of if you’re looking to book tickets (which I was, although may book Ryanair instead)...