The Icelandic airline Icelandair has reached an agreement to take over its
rival Wow Air. The two Icelandic companies will continue to operate as
separate brands, according to the Icelandair Group.
 
Both Icelandair and Wow Air sell cheap flights from Europe to North America
with transfer in the Icelandic capital Reykjavik. That airport is mainly used
by the two price breakers. On the whole transatlantic market, however, they
only have a combined market share of around 3.8 percent.
 
Icelandair had to confess last week that it had violated one of its debt
covenants and had to ask bondholders to temporarily turn a blind eye. The much
younger Wow Air is also in awkward papers. It has been losing money for
several years and sought a partner to get through the difficult winter months,
now that oil prices are rising.
 
Icelandair shareholders will be able to vote on the deal in the coming days,
Wow Air is valued at $ 18 million (15.8 million Euro). After that, the
Icelandic competition authority must also give the green light.

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 * Origin: AVIATION ECHO HQ (2:292/854)