WOW Air, the Icelandic budget airline that made travel between U.S. and Europe as cheap as $69 one way, will be acquired by rival Icelandair. The board of Icelandair Group has made a purchase agreement to buy all of low fare airline WOW Air’s stocks. The deal that could make the company a strong force in the trans-Atlantic market.
The deal, valued at $18 million, according to Reuters, must still be approved by Icelandair shareholders and by regulators.
Icelandair says the two brands will continue to operate independently. Icelandair is more of a traditional full-service carrier, offering business-class seats and amenities, similar to more traditional airlines. WOW, on the other hand, is part of a new breed of “ultra low-cost carriers” that charge extra for everything beyond boarding the plane.
Bogi Nils Bogason, the CEO of Icelandair Group, had this to say: “WOW Air has in recent years built a strong brand and achieved considerable success in their markets, to and from Iceland and over the Atlantic. There are great opportunities for streamlining but the companies will continue to run in their own respective ways under their own brand names and air operating licenses. The Icelandic travel industry is a lynchpin of the Icelandic economy and its important that air transport to and from the country is in sure hands”.
Skúli Mogensen, founder and CEO of WOW Air, stated: “I’m very proud of our success and what we at WOW Air managed to build up in the last years, and I’m also grateful for the fantastic reception we’ve had since the very first day. We’ve built up a strong team which has had noteworthy success and been a pioneer in low-fair aviation across the Atlantic. We’ve now begun a new chapter for WOW Air which gets the opportunity to grow with a strong backer in Icelandair which will strengthen WOW Air’s foundation further in international competition”.