Norwegian has said it has turned down two separate approaches from British Airways parent company IAG.

IAG took the aviation industry by surprise last month when it announced it had built up a 4.61 percent stake in its low-cost rival and that it was looking into making a bid for the company.

Norwegian said both bids were reviewed but “unanimously rejected” on the basis that they “undervalued [Norwegian] and its prospects”.

In a statement IAG said it had made contact with Norwegian board but had failed to reach an agreement, adding: “IAG is currently considering its options in relation to Norwegian.”

Neither company has given an indication of what price was offered but analysts expect it to be on the low side.

We do not know what prices were offered by IAG, but it is likely that it refused to offer a huge premium – the defiant rejection by Norwegian suggests the intersection between what a rational IAG will pay for a heavily loss-making airline, and what the Norwegian board considers acceptable, is very small (or likely non-existent),” said Bernstein’s Daniel Roeska in a note to investors.

Other Bidders

While IAG might be content to bide its time when it comes to a potential takeover, it might not be alone in coveting Norwegian.

The low-cost long-haul specialist said in its result announcement last week that it had received interest from other as-yet un-named suitors.

No other airline group has publicly said it is interested but given the consolidation at the top of the European airline industry there are only likely a few bidders who could swallow up the company.

IAG Q1

IAG has enjoyed a good start to its 2018 financial year. Revenue in the three months til the end of March rose 2.1 percent to $6 billion (€5 billion) with operating profit before exceptional items up 75 percent to $335 million (€280 million).

IAG benefited to the tune of $811 million (€678 million) from the closure of two of its pension schemes, which dramatically skewed its profit levels in the quarter.

One thing to keep an eye on with IAG and other airlines, is the rising cost of fuel. IAG said fuel unit costs for the quarter increased 0.6 per cent. Not a huge amount but perhaps a sign of things to come.

This article was updated to include additional material, including details on IAG’s first-quarter results

Photo Credit: A Norwegian 787-9 Dreamliner. The company has rejected approaches from IAG. Norwegian