Icelandair to buy rival Wow air for €18m

Shareholders to vote on deal aimed at boosting airline's international competitiveness

Icelandair warned on profit earlier this year, saying an increase in capacity across the Atlantic in some of its key markets affected peak-season fare trend.

Icelandair warned on profit earlier this year, saying an increase in capacity across the Atlantic in some of its key markets affected peak-season fare trend.

 

Icelandair said on Monday it had agreed to acquire rival Icelandic carrier Wow air for about $18 million (€15.7 million) in an all-share deal aimed at creating a stronger competitor in the international airline market.

Icelandair warned on profit earlier this year, saying an increase in capacity across the Atlantic in some of its key markets affected peak-season fare trend.

Both airlines use Iceland’s Keflavik Airport as their main hub between Europe and North America.

International competitiveness

Wow air founder Skuli Mogensen, who will receive 272 million shares in Icelandair as part of the deal, said that the deal will strengthen its international competitiveness.

Icelandair said both companies would continue to operate under separate brands and would have a combined 3.8 per cent share of the transatlantic market.

In the coming days Icelandair shareholders will meet vote on the deal.

– Reuters