Icelandair and Wow Air have merged
Icelandair and Wow Air are now a new group. This merge will help two airlines in difficulties.
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| Icelandair and Wow Air have merged(source: expriencetheskies) |
The transaction will be in the form of an exchange of shares whereby Icelandair will take full control of Wow Air. The shareholders of Wow Air will therefore hold 5.4% of its former competitor.
Difficulties for Icelandair
This agreement comes as the two Icelandic companies seem to have poor financial health lately. Icelandair has seen a restructuring of its network and its sales and marketing teams unbalanced European activity and US activity. The company subsequently had to revise its forecasts downwards (from 170-180 million to 80-100 million dollars).
A difficult market for Wow Air
Opposite, Wow Air is trying to succeed in an ever more competitive market with the offers of its competitors who are preferred to his. The reason? Direct low-cost flights, especially offered by its competitor Norwegian from London or Paris. This is a complete questioning of the Wow Air model, which operate transatlantic flights via a connection to Reykjavik.
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