Icelandair: Purchase of WOW Air to Shake Transatlantic Market

Photo: Airbus

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Icelandair, the flag carrier of Iceland, announced its plans to purchase it rival WOW Air, an Icelandic low-cost carrier. Therefore, the acquisition is still a subject to approval by Icelandair Group shareholders.

  • Both airlines will continue their operations under separate brands and operating approvals. Icelandair as a full-service airline, while WOW Air as a budget airline.
  • Combined, Icelandair says it and WOW will operate 3.8% of the capacity flying transatlantic routes.
  • The acquisition is expected to strengthen airlines’ position on the market and provide international carriers with strong competition. Also, it is expected to contribute to increase in average fares and better capacity control on the market to and from Iceland.
  • Due to rising oil prices, airline running costs and intense competition on the market, even more European airlines are predicted to suffer over the winter period. Thus, such consolidations are a popular model for airlines to continue serving the market.