Norwegian Air Shuttle chief executive Bjorn Kjos will “likely” sell his stake in the Oslo-based low-cost airline he founded if other shareholders decide to do so, he told AIN on the sidelines of the ACI Europe and World general assembly in Brussels Tuesday. Kjos declined to comment on the progress of any ongoing negotiations or the identity of any suitors, however.
Last Monday Germany’s Süddeutsche Zeitung newspaper reported that Lufthansa had been “in contact” with Norwegian, joining rival IAG in showing interest in acquiring the low-cost carrier (LCC). IAG bought 4.6 percent of Norwegian in April and made two approaches to buy the carrier for an undisclosed price, both of which Norwegian’s board rejected. The group last year ventured into the long-haul low-cost market with the Level brand; however, IAG's CEO Willie Walsh has said that he will not engage in a bidding war for Norwegian.
“I am mandated to run the airline and I will not interfere [with buyout talks],” Kjos told AIN. “This is up to the board and I will listen to what the board advises. They will take it to the shareholders and if they decide to sell, I will not go against it...I will not be the only one holding back and saying no, no,” adding, “there is a time for everything. You should not be too old in this business.” Kjos, who is 72, owns about 25 percent of Norwegian.
Kjos said he felt pride in the interest in Norwegian because “it shows we are doing something right.”
There will be more consolidation between airlines in Europe, he said, while stressing Norwegian does not need to merge or integrate into another airline. “We now have reached the size we need to be profitable,” he said while acknowledging comments from some analysts and Ryanair CEO Michael O’Leary that the company’s balance sheet has become overstretched, with too much debt and too many aircraft on order. “It all depends on how you view it,” he explained. “We bought the aircraft through export credit agencies and the interest we pay is exceptionally low, it was a strategic choice. Expansion and growth is expensive, but we now have the fleet, network, and pilots in place to move into harvest mode.”
The airline has grown quickly and in the extreme, exceeding 200 percent on some long-haul routes, reported Kjos. “It will peak in the third quarter and then we will move to a normal growth,” he said. “We will leave the large build-up behind and enter a consolidation phase.”
Reflecting on the LCC’s development, Kjos conceded the airline “has grown much faster than we anticipated and foreseen in the strategic plan, mainly because of attractive [Boeing 787] aircraft deals.”