IAG Selling Stake In Norwegian, No Longer Interested In Takeover

If Norwegian fails, as it may, the assets would become available. Nice new planes and some valuable slots at various airports, including Gatwick in particular

IAG all along had a plan in mind.... or just realized they are too busy with the post Brexit consequences on their current assets. In any case, it doesn't reflect well on them.

Next recession is just around the corner and Norwegian is loss making even in boom times. Easier to just let them go bankrupt

Hi Lucky,

It should be an interesting few months ahead for Norwegian. If they fail, the assets would become available. However, Norwegian is making a big loss here, they could take advantage in this summer instead.

Good, IAG would ruin Norwegian

Good luck Norwegian.

Your article, like many others, seem to be rooting for the failure of Norwegian. They didn't fail by the end of 2018, as many were predicting, and I wish them success as they try to survive the ocean of negative Nellies still in their midst. Norwegian has been an innovative airline and provided many people with the opportunity to see far-flung places at incredible prices. They service a niche market in the travel industry and should be lauded for that instead of calling for their demise.

Running an intercontinental airline as a LCC is always going to be tough. The LCC model cannot be fully adopted by airlines intending to operate long haul routes and thus the price point advantage is much more sensitive and narrow. There is a reason why long haul LCCs are rising - especially with the advent of much more efficient and low operating cost hardware.

A transatlantic leisure airline? I think you are forgetting the fact that Norwegian is still primarily flying within Europe, where it serves both business and leisure clients. For example in Scandinavia it is the largest airline.

Tick Tock...

Hi Lucky,

IAG themselves have made a public statement saying they will not be making a third offer, so they could not now swoop in and make a third takeover offer, having driven down the Norwegian share price - that would be market manipulation.

It sure seems like they don’t believe Norwegian will survive anymore, at least not with their current network. Given that Norwegian had to refinance some of their 787s just to free up cash to survive the winter that doesn’t surprise me, and the 21% drop in their share price sure suggests other people feel that way too.

Also can’t imagine IAG wants to take on a big acquisition right before a seemingly chaotic Brexit.

@Dexter, how is setting money on fire an innovative business model? Their job is not to subsidise travel to far flung destinations for anyone who wants to, it’s to make money transporting people... Setting unsustainably low prices just poisons the marketplace, forcing the major carriers to compete at unsustainable levels, and then cut onboard services, “densify” seats and generally make the travel experience more hellish, all chasing an airline that chose to set a price point that will NEVER be sustainable.

Fingers crossed for failure as soon as possible. Longhaul LCCs are a cancer that do nothing but drive down service levels across the industry.

I have flown Norwegian twice and have had a terrible experience on both accounts. I was called a b*****d by one of the cabin crew after I asked for a cup of tea having paid for a business class seat. So I was rather looking forward to seeing Norwegian join IAG and their operations being dissolved. Being an executive club gold member at BA I was hoping to see most of the routes in and out of Gatwick change hands to them. So now I can only hope that IAG have the bigger picture in mind and are trying to drive Norwegian into their hands

You say "IAG could be bluffing". Could you please explain how you reconcile that with Stock Market rules around market announcements?

There's really no point in investing in a failed enterprise. Wait for them to implode and then just pick up the pieces. It's not brain surgery.

Chris C....are you for real? You really think that IAG planned this all along? They made two offers that were turned down, then walked away from the deal, not believing Norwegian to be worth any more. How the hell does that reflect badly on IAG?

Whilst I have no desire to fly them across the Atlantic, I’d be sad to lose Norwegian in Europe given the price impact they’ve had on routes to Scandi (and no difference in product really for short-haul).

I wonder how rude / entitled one has to behavior towards the cabin crew to be called a b*****d by them.

I fly a lot (including once in premium in Norwegian) and this never seems to happen to me or anyone I’m friends with. Feels like a mirror moment..

As with any long term, sustainable business, if it doesn’t make money, it doesn’t make sense.

Norwegian, Southwest,and Jet Blue are unique in their product and open approach to pricing and loyalty rewards. Other airlines are only differentiated by their logo

I am rooting for Norwegian

My last Norwegian AMS-ARN experience was hellish. An AMS inbound passenger took a FA’s rollaboard by mistake. The captain decided to delay the entire plane load of people for almost 2 hrs whilst they tracked down the errant passenger and retrieved the Norwegian employee’s bag. They were in phone contact the entire time, and we were treated to frequent updates like “he’s on the motorway back to airport”. Outrageous.

@Reb_Robbo You are so candid. You probably also think that the infamous meeting between Trump and airlines executives on February 9, 2017, was all about menus and wine selection onboard. I have to admit, I would LOVE to know what they talked about during the 45 minutes off the record after the meeting...

Anyways, sure, I let you think IAG are the good guys. If that makes you feel better.

Chris C - I have no idea of what you're talking about.
But there again, you've already proved that you don't either.

red_robbo I suggest Google: "Airlines, executives, white house, meeting". That's a good start.

Stay informed...

Chris C - Why should I? I'm not in the least interested in what goes on in the White House!!!
I hate to inform you that this post is about Norwegian and IAG.

p.s. Are you Debit in disguise?

red_robbo It all started when I said you were truly candid.
Maybe that's how you act/think in general. No judgment.
But the world is a bit more complicated...
Have a good one!