British Airways owner IAG looks to sell Norwegian Air shares
The group said it had bought shares as part of an attempted takeover
Willie Walsh, chief executive of British Airways owner IAG, said the group is looking to sell its shares in low-cost carrier Norwegian Air after failing to negotiate a takeover.
Airline group IAG bought 4.6 per cent of Norwegian earlier this year as a prelude to discussing a takeover, but had two proposals rebuffed.
Mr Walsh said: “We’re not going to keep the shares, we’re not an investor. We bought that small stake to initiate a conversation and if that conversation is not going anywhere, as it’s not, we’re not going to hold on to those shares.”
Norwegian said it had received several expressions of interest from “serious players,” including rival airlines such as the Lufthansa Group. “We are happy to have IAG as an investor. Needless to say, they are not the only interested party that has approached us,” said Bjorn Kjos, Norwegian’s chief executive.
Bjorn Kise, Norwegian’s chairman who together with Mr Kjos owns 27 per cent of the airline, said: “When you are going through a phase of big expansion, it makes the company — with all its costs, its investments — vulnerable.”
Mr Walsh also hit out at Heathrow airport, which has a £14bn scheme to build a third runway but which has also paid large dividends to shareholders.
“I’m all in favour of a well-run company paying dividends, but that’s not Heathrow,” Mr Walsh said. “Heathrow is a quasi-monopoly that games the economic regulation environment to raise the charges that they can levy and has done well in the past to convince the regulator to reward them by spending more money.
“My objection is to the fact that they’re incentivised to waste money and I’m particularly concerned that the incentive remains in place in the context of Heathrow.”
In its half-year results on Friday, IAG reported strong pre-tax profit growth, up almost a quarter to €1bn. At lunchtime its shares were down 3.1 per cent. Norwegian’s shares were up 1.8 per cent.