As well as criticising air traffic controllers, IAG chief executive Willie Walsh used the GTMC Conference to reiterate his interest in acquiring Norwegian – but hinted time may be running out as the airline faces tough financial challenges, writes Matthew Parsons in Dublin.
Speaking at the Powerscourt Hotel, Walsh said: “Norwegian is a good airline; they proved the customer wants the [low-cost, long-haul] product. We did approach them, it’s no secret; we bought a small stake of 4.6 per cent, and I approached Bjorn [Kjos, chief executive] to demonstrate our commitment and belief in the business. I said we weren’t going to make a hostile bid. We wanted to work with them, if they wanted to be part of IAG.
“Norwegian would be a good fit. The lawyers became involved, and we did mention a figure to them, which they rejected. We’ve had no contact with them in two months. We’re watching.”
When quizzed by moderator David Kurk if IAG was still interested, Walsh replied: “At the right price, yes. But what’s happened since is that the fuel price has gone up significantly, and we’ve also seen volatility with the dollar. Norwegian is not hedged. Going into this year, they’ve got about 25 per cent hedged. We’ve got about 70 per cent.”
During the Q&A session, Walsh was also characteristically frank with delegates. “The financial performance is challenging, but for those of you who know Bjorn, this guy has balls of steel,” he joked. “If you look at his balance sheet, it’s the most stressed leverage balance sheet that you could see, but the guy goes round with a big smile on his face.” However, Walsh revealed his admiration for the airline founder, and said Kjos had done an “exceptional job – I really admire him for that”.
“He’s created something that some people have predicted will disappear. There is a risk to that, but as part of IAG we would secure the legacy, his legacy of what he has created, and we believe this is a sector that we can serve profitably,” he added.
Walsh also talked about LEVEL – the low-cost, long-haul carrier IAG launched in March 2017. He told delegates that within the first 24 hours, it sold 50,000 seats. “We are going to accelerate the growth of LEVEL,” he added. “We can do it organically, or we can do it through an acquisition. But if Norwegian doesn’t want to be a part of IAG, that’s fine. We’re not going to try and force the issue.”