British Airways owner International Airlines Group (IAG) has confirmed that it is exploring a potential acquisition of low-cost carrier Norwegian Air Shuttle.
IAG said in a stock market announcement that it has acquired a 4.61% stake in the airline, which is “intended to establish a position from which to initiate discussions with Norwegian”, including the possibility of a full offer for the firm.
The statement continued: “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.
“A further announcement will be made if appropriate.”
Norwegian Air has expanded rapidly over the last 12 months, ordering new aircraft to serve a raft of new routes.
The firm has shaken up the long-haul market by offering flights at knockdown prices.
Some of its most popular deals have included £99 flights from Edinburgh and Dublin to New York.
As well as British Airways, IAG also owns Spanish low-cost airline Vueling and recently launched a budget long-haul operator dubbed Level.
Shares in Norwegian Air rocketed 18% in Oslo following news of IAG’s interest. IAG shares were flat.
Norwegian Air carries over 30 million passengers a year and last year struck an agreement so easyJet customers could access its long-haul routes.
It has also explored a long-haul flight deal with Ryanair, but talks between the airlines collapsed.
The firm put its hat in the ring to pick up bust rival Monarch’s landing slots at Gatwick.