The owner of British Airways has said it is considering making a bid for rival airline Norwegian, amid fierce competition between the two for transatlantic passengers.

International Airlines Group (IAG), formed via the 2010 merger of BA with Spanish flag-carrier Iberia, said it had built up a stake of 4.6% in Norwegian, and that it sees the rapidly expanding airline as an “attractive investment”.

In a statement to the stock market, IAG said: “The minority investment is intended to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer for Norwegian.”

Norwegian’s shares soared on the back of IAG’s interest, a 47% rise taking its stock market value above £900m on the Oslo exchange. Shares in IAG closed down just over 1% on the news.

The company said it did not know of IAG’s interest until press reports on Thursday morning and had not held any discussions with IAG.

It added that the BA owner’s interest confirms the potential of Norwegian’s business model and its growth prospects.

Norwegian has proved a thorn in BA’s side of late, launching low-cost transatlantic routes and picking up new landing slots at Gatwick as part of aggressive expansion plans. Norwegian launched its transatlantic service from UK and Ireland last year with some fares as low as £69 one-way, although that excluded reserved seat, onboard food, or checked baggage.

Norwegian is the fastest-growing major transatlantic carrier, with scheduled capacity for summer 2018 of more than 1.5 million passengers, an 87% increase on last year, according to data compiled for the Guardian by flight data firm OAG.

Norwegian has typically been able to undercut traditional airlines by offering passengers the option to forgo services such as reserved seats, an inflight meal and checked baggage.

BA responded this week by launching its own long-haul no-frills options, while it has also launched a new transatlantic service flying out of Barcelona, called Level.

John Strickland, director of independent transport consultancy JLS Consulting, said an IAG takeover of Norwegian made sense given the growing rivalry.

“IAG has been proactive in response to Norwegian’s growth by competing in a number of ways including putting more seats on BA’s [Boeing] 777s out of Gatwick, setting up Level and using Aer Lingus via Dublin.

“Norwegian is also not financially strong, they made a loss last year and have warned of a larger than anticipated first-quarter loss.

“They’ve got significant numbers of aircraft on order and there’s a lot of industry conjecture about the sustainability of the airline’s model considering the ambitious growth.”

Ryanair’s chief executive, Michael O’Leary, predicted last year that Norwegian wouldn’t survive the winter due to its ambitious growth plans and rising costs.

The suggestion drew a fierce riposte from Norwegian’s management, who accused O’Leary of being annoyed at losing his pilots to the rapidly expanding airline.

IAG chief executive Willie Walsh has been more complimentary about Norwegian’s tactics, said Strickland.

“Walsh has said that Norwegian has proved there’s a market for low-cost long-haul – and has generated new traffic rather than cannibalising what’s there already,” he said.

“They’re going to come up against each other more often so IAG probably see a chance to manage that in a more controlled fashion.”

Michael Hewson, of spreadbetting firm CMC Markets, said: “This morning’s news [of bid interest] suggests that IAG feels that there is an opportunity here given the level of the share price, or it could simply be keeping its options open in the event of further difficulties [at Norwegian]. Time will tell.”

When IAG was formed, Walsh said he had a shopping list of at least 10 airlines he believed the group could buy in order to expand.

Since then, he has struck deals to take over just three: Spanish low-cost carrier Vueling; British regional airline BMI; and Aer Lingus, the Irish airline where Walsh served as chief executive before moving to British Airways.

If IAG goes ahead with a bid for Norwegian, it could be forced to pay something close to its largest acquisition, the £1.2bn deal for Aer Lingus completed in 2015.