Seasoned deal-maker Walsh was much quicker than rival full-service airlines Air France-KLM and Lufthansa to embrace budget flying, buying short-haul carrier Vueling in 2015 and setting up IAG's own long-haul low-priced carrier Level past year.
IAG said on Thursday that it has acquired a 4.61 percent stake in Norwegian and that it planned to start talks with the airline which included the possibility of a full offer for the company being made.
Norwegian said in a statement released via the Oslo stock exchange that it had been unaware that IAG had acquired a stake until press reports Thursday morning and had not held any discussions with the airline group. The Scandinavian airline added that "it has not entered into any discussion or dialogue with IAG about matter", although it indicated that "IAG's interest in company confirms sustainability and potential of our business model and our Global growth ".
The firm has had a major impact on the long-haul market in Europe, undercutting rivals on trans-Atlantic ticket prices.
"A partnership that looks to maximize the synergies of the two networks, minimise duplications of capacity and investment on key routes, and use IAG's travel management capabilities to improve Norwegian's expertise in this area could all provide some of the benefits of consolidation without the likely high cost of a deal", they said. It added Aer Lingus and the Spanish budget airline Vueling to its portfolio in 2015.
In its wake, Icelandic budget carrier Wow has also entered the USA market and grown rapidly, while the Primera Air will launch service this month.
IAG has taken a 5pc stake in Norwegian with a view to launching a full takeover bid. Pic Getty
Norwegian shares rose by 40% in early trading upon the news.
The purchase of Norwegian would benefit IAG's British Airways gain a bigger share of the low-priced market.
In June 2017, IAG launched rival low-priced transatlantic carrier Level, applying the same bare-bones business model.
There will be no buying Norwegian on the cheap, however, said SEB analyst Jo Erlend Korsvold.
IAG's interest in Norwegian is likely driven in part by the Norwegian's strong presence in London, where it is the third-largest carrier at Gatwick airport.
Norwegian Air carries over 30 million passengers a year and last year struck an agreement so easyJet customers could access its long-haul routes.