IAG may consider a bid for Norwegian after taking a 4.61% minority stake. Source: Norwegian/David Charles Peacock.

British Airways owner International Airlines Group (IAG) has announced it has taken a 4.61% stake in Norwegian Air Shuttle (Norwegian).

In a statement responding to press speculation that it was looking to make an offer for Norwegian’s low-cost flag carrier, it said: “The minority investment is intended to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer for Norwegian.”

IAG says that discussions with a view to making an acquisitive bid have not taken place, moving to point out that there is no certainty it would be bidding at all.

Surprisingly, Norwegian says it had no knowledge of the acquisition before it was first reported by the media yesterday morning.

“Norwegian has not been in any discussions or dialogue with IAG about the matter,” it said in a statement. “Norwegian believes that interest from one of the largest international aviation groups demonstrates the sustainability and potential of our business model and global growth.”

IAG CEO Willie Walsh has made clear his ambitions to expand in the low-cost, long-haul market.

LONG HAUL, LOW COST ADVANTAGE

 Should IAG pursue a full offer for Norwegian, it would undoubtedly unlock further doors to the rapidly lucrative long-haul, low-cost market.

Norwegian currently handles 5.8m passengers per year serving 50 destinations worldwide from its bases at London Gatwick, Edinburgh and Manchester airports.

It is the third largest airline at LGW and in 2014 launched the UK’s first low-cost, long-haul flights to the US.

Last year, IAG launched low-cost, long-haul brand LEVEL, which began summer flights from Barcelona to Los Angeles, San Francisco (Oakland), Buenos Aires and Punta Cana designed to serve as IAG’s fifth main airline behind Aer Lingus, BA, Iberia and Vueling.

IAG Chief Executive Willie Walsh spoke at the time the deal was announced that the group would look to expand the airline to other destinations.