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23 May 2018

BY Edward Robertson

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Rising oil prices could force Norwegian to reconsider acquisition offers

The rising cost of oil could soon force Norwegian to seriously consider any further acquisition offers made towards the low cost carrier.

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The boss of Qatar Airways believes IAG could be third time lucky having had two bids rejected

Speaking in a media briefing in Doha, Qatar, Akbar al Baker, the CEO of Qatar Airways which owns a 21% stake in IAG, added the low cost carrier’s rejection of two IAG bids could be a negotiating tactic.

 

However, he argued global economic circumstances could force Norwegian’s bosses to the board room should IAG, which recently bought a 4.6% stake in the no-frills airline, make a third offer.

 

Al Baker said: "They (the rejections) could be (a ruse). If I am a company that knows somebody wants to buy me, I will of course up the price.

 

"But how long can I demand that when the water is rising very hard up to my nose?"

 

"If you ask the financial markets they will say it needs a strong partner to survive, especially since the oil price is rising.

 

"It will only be a matter of time before they have no alternative but to accept a bid from somebody; IAG or someone else."

 

Meanwhile, al Baker added he believes Qatar Airways is well placed to weather any rises in the oil price and will introduce surcharges again should they be required.

 

He also said the airline was back for the foreseeable future at Gatwick following the reintroduction of flights to the airport after the last ones were pulled in 2011 and following the launch of flights from Cardiff earlier this month.

 

As far as other airports in the UK are concerned, al Baker admitted he had his eyes on Belfast for a new route as the airline seeks to be operating 250 routes by 2022, about 90 more than are currently in operation.

 

He added: "I cannot tell you when and what will be the number of frequencies but yes, we plan to go to Belfast."

 

However, al Baker admitted expansion may not be as easy elsewhere as many governments around the world are still too protective of their own national airlines to allow Qatar to compete against them.

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