Now this is interesting…
Norwegian, to put it lightly, is the thorn in the side of every major airline. They’re cheap, well branded, pretty well liked and are expanding around the globe like ticks. The carrier, along with other low cost carriers has forced legacy airlines to drop prices to record lows, just to compete. This has uprooted the traditional airline experience – full stop. IAG, the parent company of Iberia, British Airways, AerLingus and Vueling seems poised to use the old adage, “the enemy of my enemy is my friend”, by potentially turning an enemy into a financial asset.
FlightGlobal reports IAG has acquired a 4.61% share in Norwegian Airlines. This is a significant development, and one which IAG is said to view as an opening point for future discussions. This position instantly changes the dynamics of low cost competition and IAG has offered specific comment that a “full offer for the airline” could be later forthcoming.
Enemy Of My Enemy
A major airline group potentially taking ownership of Norwegian is a bit like buying an attack dog. Ruff, ruff. Rather than fighting Norwegian head on in key premium markets, disrupting airlines like British Airways, IAG could use Norwegian as a vessel to attack competitors from Star Alliance and SkyTeam, helping to launch increased routes in competitor strongholds, while steering the airline clear of Iberia and British Airways ire.
“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”
No Further Comment
This is inflammatory news, sure to turn many heads. And for Norwegian, an airline rumored to be spiraling in debt despite excellent growth – this could be the perfect life preserver at an ideal time. For now, IAG has no further comment on the situation and nor does Norwegian. Watch this space though, because it could just be the airline story of the year. And that’s despite stiff competition from the fascinating relationship between Qatar Airways and Air Italy…
What do you make of this new ownership stake?