It seems consolidation is the name of the game once again, this time with IcelandAir Group to take over WOW Air.
According to MBL, the sale will is on condition that it is approved at n Icelandair Group stockholders meeting and the takeover is it is approved by the approval of the Icelandic Competition Authority.
The combined airline will have around 3.8% of the transatlantic market. The current intention is for both airlines to operate under their own brands.
On the purchaseBogi Nils Bogason, Interim President & CEO, Icelandair Group said:
“WOW air has in recent years built a strong brand and enjoyed great success in the company‘s markets to and from Iceland and across the Atlantic.. There are many opportunities for synergies with the two companies but they will continue to operate under their own brands and operating approvals. The tourism industry is one of the cornerstones of the Icelandic economy and it is important that flights to and from Iceland will remain frequent.“
Meanwille Skúli Mogensen, CEO and founder of WOW air states
“I am very proud of the success and development that we at WOW Air have enjoyed in the past few years and I am thankful for the response we have received since our very first flight. We have created a strong team that has reached remarkable success and has been a pioneer in low cost flights across the North-Atlantic. A new chapter now starts where WOW air gets an opportunity to grow and prosper with a strong backer like Icelandair Group that will strengthen the foundations of the company and strengthen its international competitiveness even further.“
Post merger, it will be intresting to see how these brands work together and see what one brand learns off another. However – with airlines feeling the pinch right now, the options are become simple and start (especially with fuel prices going up ) – consolidate or die.
With Icelandair Group in the process of disposing of its hotel arm, and WOW Air cutting back new routes, airlines are having to think of their next options, and how best to survive.
In addition, there has been a lot of capacity added on transatlantic routes for some years. It seems some of that capacity is changing sooner than some might have expected.
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