May 18, 2018 / 11:36 AM / 2 years ago

IAG boss says Norwegian not a must-have deal, won't go hostile

DUBLIN (Reuters) - IAG (ICAG.L) is not expecting to announce a deal to buy Norwegian Air Shuttle (NWC.OL) soon and would not make a hostile bid, its chief executive said, adding his airline group had growth opportunities on its own.

FILE PHOTO: Willie Walsh, CEO of International Airlines Group speaks during the closing press briefing at the 2016 International Air Transport Association (IATA) Annual General Meeting (AGM) and World Air Transport Summit in Dublin, Ireland June 3, 2016. REUTERS/Clodagh Kilcoyne

Norwegian said earlier this month it had rejected two approaches from IAG, the owner of British Airways, Iberia, Aer Lingus and Vueling, because they undervalued the company.

“This isn’t a deal I have to do. We have expressed an interest. If they don’t want to be bought by IAG, fine,” IAG CEO Willie Walsh told Reuters on the sidelines of a CAPA-Centre for Aviation conference. “I am not going to do anything hostile, that’s not my style.”

He said his last contact with Norwegian was several weeks ago and he wasn’t expecting any imminent meetings.

“If we do something, we are responsible and would make the required announcements, but I am not expecting to have to do anything in the coming weeks or months,” he said.

When asked about other possible bidders for Norwegian, Walsh said IAG would not be drawn into a bidding war and that IAG could also grow in the low-cost long-haul area with its Level brand.

“We are not going to engage in any ridiculous bidding wars ... We know what the value to us would be and that doesn’t change because somebody else expresses an interest.”

Shares in Norwegian dropped 7 percent after the comments.

Walsh also said IAG would place an order for 20-25 widebody jets at the end of this year or the first half of next year, highlighting Boeing’s (BA.N) 777x as a contender. IAG is also in talks for additional 777-300ERs, he said, whether directly from Boeing or as second hand aircraft on lease.

On engine issues that have hit airlines across the world, he said IAG may have to ground five or six 787 Dreamliners with Rolls-Royce Trent 1000 engines this summer and that he was disappointed by the engine maker’s response.

“We’re a big Rolls customers, we’ve got a lot of Rolls engines, and I don’t think they’ve responded as positively to this problem with the industry as I would have expected,” he said.

IAG is hoping to lease three Airbus A330 planes and crew from Qatar Airways to make up for the shortfall in the summer.

Reporting by Victoria Bryan; Editing by Sarah Young and Mark Potter

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