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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  International Consolidated Airlines Group, SA    IAG   ES0177542018

INTERNATIONAL CONSOLIDATED AIRLINES GROU

(IAG)
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Norwegian Air, JetBlue tie up to expand transatlantic network

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10/17/2019 | 09:48am EST
The JetBlue Airways logo is seen on a revolving door entering John F. Kennedy Airport in the Queens borough of New York

OSLO (Reuters) - Norwegian Air and New York's JetBlue Airways plan a partnership enabling passengers flying between Europe and the United States to continue to multiple destinations under a single booking, potentially boosting traffic and average fares.

The airlines said in a joint statement on Thursday that if agreed the partnership would come into effect in the middle of next year.

Norwegian, Europe's third-largest budget carrier, has shaken up the market for travel across the Atlantic with cut-price fares that challenge traditional carriers such as IAG's British Airways, but its breakneck expansion left it with high debts and in the red.

The partnership with JetBlue will connect JetBlue flights from around 100 cities in the Americas to Norwegian's network in New York, Boston and Fort Lauderdale, from which the carrier serves more than 20 European destinations.

The deal could help both airlines to boost traffic and the average fares they earn as transatlantic services are extended beyond the biggest U.S. cities, Bernstein analyst David Vernon said.

Norwegian already has a European partnership with London Gatwick-based easyJet, but until now lacked a U.S. partner.

While Norwegian and other low-cost long-haul operators have challenged the big network carriers on their main intercontinental routes, the incumbents' connecting traffic to smaller destinations has so far remained largely out of reach.

"If you compete on a purely point-to-point basis, you're in the most commoditized, lowest-yielding segment of the market with no subset of passengers to destinations that rivals can't get to," Bernstein's Vernon said.

"This is an opportunity for Norwegian to capture some extra, more profitable traffic," he added.

Shares in Norwegian Air, which is cutting costs to try and return to profit, surged 10% on the news before giving up some gains to trade up 3.8% by 1248 GMT, outperforming an Oslo benchmark index <.OSEBX> up 0.6%.

"Customers will have the possibility to book connecting flights on both airlines' websites by combining the best of our complementary and expansive networks," the airlines said.

JetBlue Airways Corp has said that it hopes to break into the low-fare, transatlantic travel market.

"This new agreement ... seamlessly connects JetBlue's robust network throughout the U.S., Caribbean and Latin America with ... exciting European destinations," JetBlue Chief Executive Robin Hayes said in the statement.

(Additional reporting by Laurence Frost in London; Editing by Mark Potter, Susan Fenton and Alexandra Hudson)

By Victoria Klesty and Terje Solsvik

Stocks mentioned in the article
ChangeLast1st jan.
EASYJET 5.33% 1344.5 Delayed Quote.21.67%
INTERNATIONAL CONSOLIDATED AIRLINES GROUP, SA 0.95% 553.8 Delayed Quote.-10.39%
JETBLUE AIRWAYS CORPORATION -0.57% 19.36 Delayed Quote.21.23%
NORWEGIAN AIR SHUTTLE ASA -0.07% 40.57 Delayed Quote.-59.46%
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Financials (EUR)
Sales 2019 25 633 M
EBIT 2019 3 238 M
Net income 2019 2 196 M
Debt 2019 7 341 M
Yield 2019 4,55%
P/E ratio 2019 6,08x
P/E ratio 2020 5,61x
EV / Sales2019 0,79x
EV / Sales2020 0,74x
Capitalization 12 824 M
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Technical analysis trends INTERNATIONAL CONSOLIDATED
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Mean consensus BUY
Number of Analysts 18
Average target price 7,88  €
Last Close Price 6,46  €
Spread / Highest target 79,4%
Spread / Average Target 21,9%
Spread / Lowest Target -8,55%
EPS Revisions
Managers
NameTitle
William Matthew Walsh Chief Executive Officer & Director
Antonio Vázquez Romero Chairman
Stephen William Lawrence Gunning Chief Financial Officer & Executive Director
Kieran C. Poynter Independent Non-Executive Director
Alberto Miguel Terol Estabean Senior Independent Director
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