Reykjavik - Icelandair Group has signed an agreement with WOW Air to acquire all shares of its competitor. The deal has yet to be approved by the Icelandair shareholders and by the Icelandic authorities.

The shareholders of WOW air will receive 5.4% of Icelandair Group‘s shares after the transaction.

Both airlines will continue to operate under their current brands. After the acquisition, their combined market share on the Atlantic aviation market will increase to around 3.8%.

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 respective ways under their own brand names and air operating licenses. The Icelandic travel industry is a lynchpin of the Icelandic economy, and it is important that air transport to and from the country is in sure hands,
said Icelandair Group CEO Bogi Nils Bogason.

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 the international competition,
said Skúli Mogensen, founder, and CEO of WOW Air

The chances are that the acquisition will generate opportunities for Icelandair to expand into new markets by adding new routes to its existing network and to compete better with the other airlines on the international aviation market.

The two companies together have a fleet of 56 aircraft. WOW Air has an all-Airbus fleet while Icelandair operates a fleet of all-Boeing.