Icelandair Group has agreed to acquire rival Icelandic carrier Wow Air for around $18m in an all-share deal aimed they say is aimed at creating a stronger competitor in the international airline market, FlightGlobal reports.
The move comes amid rising airline fuel costs and keen competition in the transatlantic market from rivals lcc airlines Norwegian and Level.
Both Wow Air and Icelandair operate flights to North America from Dublin via their hubs in Reykjavik.
The Icelandair group says the share purchase agreement is subject to shareholder approval.
It said the two companies will continue to operate under separate brands. The carriers have around a 3.8pc combined share of the transatlantic market.
Icelandair’s interim Chief Executive Bogi Nils Bogason said: “The acquisition creates opportunity for both companies to become even better prepared to provide international carriers with strong competition in the international airline market.”
Wow Air CEO Skuli Mogensen, who founded the budget airline, said it will have an “opportunity to grow and prosper” with Icelandair as its “strong backer”.
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