Norwegian Air Says Takeover Interest Validates Business Model
Norwegian Air remains confident of its business model, its CEO told shareholders following the company's rejection of two takeover proposals from British Airways owner IAG.
London-listed IAG last month took a 4.6% stake in the airline, which in turn triggered interest from other suitors, according to earlier statements from Norwegian's board.
"Acquisition interest from several parties confirms the sustainability of the business model," chief executive Bjoern Kjos told the company's annual shareholder meeting.
Loss-making Norwegian is in the midst of a massive transatlantic expansion aimed at turning around the company's fortunes by replicating the low-cost model that worked for European flights.
Analysts on average expect the airline's revenue to grow by an 84% between 2017 and 2020 to 56.9 billion Norwegian crowns ($7 billion), according to I/B/E/S forecasts on Thomson Reuters Eikon.
While the company is expected to post a net loss of 650 million crowns in the current year, the analysts forecast a profit of 723 million crowns in 2019 and 1.2 billion crowns the following year.