International Airlines Group has officially confirmed that it has abandoned its attempt to bid for Norwegian.
IAG issued a short update to the stock exchange shortly before 12:30 GMT on Thursday 24 January 2019 to confirm that it will not bid to buy the airline. It will also sell its shareholding of just under 4%.
Last April, IAG acquired a stake in Norwegian with a view to making a bid for the airline.
IAG always maintained that it would not make a hostile bid for the airline. It had made conditional offers in private which had not been accepted by Norwegian.
Due to the size of their shareholdings no bid could be successful without the support of its co-founders, Bjørn Kjos and Bjørn H. Kise who own a joint 27% stake in the airline.
IAG has praised Norwegian for proving there is a market for low lost long-haul travel but has said that Norwegian’s growth rate is unsustainable. Norwegian is currently moderating its growth as well as undertaking cost-saving measures and reshaping its route network.
It has to be said that given the number of overlapping city pairs between IAG airlines and Norwegian, and increased regulatory scrutiny of joint-ventures, it was unlikely a bid could succeed without significant slot divestures.
This means that IAG is likely to pursue growth in low cost long-haul through its own brand LEVEL, and a new aircraft order for LEVEL is expected shortly.
Norwegian issued the following statement in response:
“Norwegian’s plans and strategy remain unchanged. The company’s goal is to continue building a sustainable business to the benefit of its customers, employees and shareholders.”
Norwegian continues to reshape its network at London Gatwick.
After suspending Singapore and launching Rio de Janeiro, it will switch its existing routes to Fort Lauderdale and Oakland to Miami and San Francisco International respectively.
The changes will take effect from Sunday 31 March 2019. Norwegian will fly to Miami daily and to San Francisco five times weekly.
Norwegian cites passenger demand and increased cargo capabilities for the decision. This is similar to low cost short-haul airlines who first started flying to secondary airports in Europe and then moved to primary airports as they reached maturity. Norwegian will continue to serve a number of cities in mainland Europe from Fort Lauderdale and Oakland.
This will leave Oakland with no direct service to London after BA suspended the route this year.
BA did also launch Fort Lauderdale after Norwegian. Its CEO Alex Cruz did say that serving Fort Lauderdale from Gatwick and Miami from Heathrow works well for passengers wanting a choice of Florida airports, so it looks like this will continue.
Norwegian has launched a new route from London Gatwick to Rio de Janeiro.
This is Norwegian’s second route from Gatwick to South America after Buenos Aires.
Norwegian will fly four times weekly on Monday, Wednesday, Friday and Sundays from Sunday 31 March 2019. Flights will be operated with the Boeing 787-9 Dreamliner.
The route is effectively a replacement for London Gatwick – Singapore which ends on Thursday 28 March 2019.
Norwegian will be competing against British Airways, which is the only other airline to fly direct from London to Rio. Like BA, the outbound flight is a day flight from London.
Rio de Janeiro is a stunningly beautiful city to visit and it would take a heart of stone not to be seduced by it. Brazil does of course have well documented problems and a volatile political culture. However, this should not deter visitors. Rigid adherence to basic personal safety advice does go a very long way.
London Gatwick – Rio de Janeiro
Flight DI7501 Depart London Gatwick 12:00 – Arrive Rio de Janeiro 19:25 (Monday, Wednesday, Friday, Sunday)
Flight DI7502 Depart Rio de Janeiro 22:25 – Arrive London Gatwick 13:35 (Monday, Wednesday, Friday, Sunday)
Norwegian’s routes to Austin and Seattle which both launched only recently will be suspended for the winter season from Sunday 28 October 2018 and should resume from late March 2019.
Las Vegas, which had been suspended for the summer, returns three times weekly for the winter.
The following routes will also benefit from increases in frequency:
– Boston from five times weekly to daily
– Buenos Aires from four times weekly to daily
– Fort Lauderdale from three times weekly to daily
– Orlando from three times weekly to four times weekly
The following routes will be reduced in frequency:
– Chicago from daily to four times weekly
– Oakland from four times weekly to three times weekly
New York JFK will also increase to three times daily, as previously announced. The suspension of Austin and Chicago for the winter does suggest Norwegian has hit a ceiling in terms of year round routes to North America from London Gatwick.
All flights continue to be operated by Boeing 787-9 aircraft in a two class configuration, save where Norwegian has wet-leased aircraft as it has done to New York JFK.
Norwegian is of course subject to takeover speculation following International Airlines Group’s purchase of a minority stake in the airline. Should there be a change in ownership in Norwegian in the coming months it is highly likely there will be changes to its network.
Norwegian has unveiled ambitious plans to expand its long-haul network at Gatwick and to grow its fleet. However, its financial results show a net loss of of NKr299m (£27.7m) for the year to 31 December 2017.
Norwegian launched its inaugural route from London Gatwick to Buenos Aires on Wednesday. The day before it held a press event to herald its ambitions for the UK.
Norwegian unveiled a shopping list of possible future long-haul routes from London Gatwick.
These routes include Tokyo, Shanghai and Beijing. Norwegian is also due to take delivery of the Airbus A321 Long Range aircraft in 2019 and, from 2020, this could operate routes from London Gatwick to Philadelphia, Detroit and Minneapolis.
The airline also has firm plans to increase frequencies on London Gatwick – Los Angeles and Fort Lauderdale this summer. It is also hoped to increase London Gatwick – New York JFK to three times daily.
Norwegian was duly rewarded with one of the most read articles on BBC News Online on Wednesday, which only touched on the sustainability of its business model towards the end of the article.
There was less positive news for Norwegian’s shareholders today.
Norwegian is to launch yet more long-haul routes from London Gatwick with the addition of Chicago O’Hare and Austin to its network from late March 2018
Norwegian will fly to Austin three times weekly from Tuesday 27 March 2018 and Chicago O’Hare four times weekly from Sunday 25 March 2018.
The launch of Austin will create a second link between London and the city. Currently, British Airways is the only airline to fly direct between London and Austin.
Yet more expansion by Norwegian is a major headache for both BA and Virgin Atlantic. Norwegian can now claim to serve two US states not served by Virgin Atlantic: Illinois and Texas. Virgin Atlantic suspended Chicago this year.. BA has also coveted being the exclusive operator of routes such as Austin as it gives the airline pricing power in the market.
Norwegian has announced yet another long-haul route from London Gatwick. The airline will fly to Buenos Aires four times weekly from Wednesday 14 February 2018. This will be the airline’s first direct route from London Gatwick to South America.
As per other long-haul routes at Gatwick, the route will be served by Norwegian’s Boeing 787 Dreamliner in a two class configuration.
Norwegian’s aggressive expansion at London Gatwick continues with the launch of a new route from London Gatwick to Singapore Changi airport.
The route will launch on Thursday 28 September 2017. It will initially operate four times weekly, increasing to five times weekly from Monday 30 October 2017. The flight will be operated by the mainstay of Norwegian’s long-haul operations, the Boeing 787 Dreamliner in a two class configuration.
Norwegian Air Shuttle continues its rapid expansion at London Gatwick with the launch of new direct flights to Las Vegas.
The airline will fly to Las Vegas twice weekly (Monday & Thursday) from Monday 31 October 2016.
This will be Norwegian’s 8th long-haul route from London Gatwick after New York, Los Angeles, San Francisco – Oakland, Boston, Orlando, Fort Lauderdale and Puerto Rico.
Norwegian will be competing against direct flights by Virgin Atlantic from London Gatwick and British Airways from London Heathrow.
On that note, the very rapid growth by Norwegian is not going unnoticed by either British Airways nor Virgin Atlantic. We have already seen British Airways reinstate its London Gatwick – New York JFK route as an apparent competitive response. We would not be surprised to see further activity by either airlines which both depend very heavily on transatlantic traffic for profitability.
Flights are on sale now at Norwegian.com and an initial scan of fares shows return trips being available for less than £399.
London Gatwick – Las Vegas
Flight DY7107 Depart London Gatwick 12:10 – Arrive Las Vegas 16:00 (Monday, Thursday)
Las Vegas – London Gatwick
Flight DY7108 Depart Las Vegas 18:00 – Arrive London Gatwick 10:50