London - The British Airways parent IAG drops takeover plan for the Nordic budget carrier Norwegian. IAG announced that it wouldn't bid for Norwegian and sell its already-acquired stake in the company of nearly four percent.
The Norwegian shares reacted to the news with a sharp price slide. On the Oslo Stock Exchange, the company lost around 18 percent in value. The International Airlines Group had expressed interest in the Fornebu-based airline last April. The shares of the company have risen significantly on the Oslo Stock Exchange since then.
Norwegian, with more than 140 jets has been in financial distress after a strong growth period. The company is considered a pioneer in low-cost long-haul flights and maintains a large European network at the same time.
In recent years, Norwegian caught one of the higher growth rates in the commercial aviation history as it aims to become a major player in the low-cost market applying the business model to transatlantic flights by means of more fuel-efficient new generation widebody and narrowbody aircraft.
In addition to British Airways, IAG owns the airlines Iberia, Vueling, Aer Lingus, and Level. The decision to drop the bid by the Anglo-Spanish Group will intensify worries about the airline’s capability to prevent a bankrupt. Last week Norwegian announced that it would close some bases and routes in Europe.