Icelandair has been under intense pressure from Wow, an ultra low-cost carrier. With the purchase it will be able to get rid of a thorn in its side at a rock bottom price.
Icelandair promises to keep operating both brands, though airlines often make promises that they won’t keep in order to gain regulatory approval for a merger. We’ll see if they actually keep Wow around long-term or if they merge its operations into Icelandair.
Wow has struggled of late, cutting service to Cincinnati, Cleveland, Dallas, JFK, and S. Louis. They also changed Tel Aviv from a year-round destination to a summer only destination. It’s no surprise that the sale price is so small given their troubles.
Mergers are normally bad for consumers, but in this case it might just keep both airlines alive. Hopefully Icelandair will take over some of Wow’s cancelled destinations and start serving Tel Aviv year-round in the future, a route that can always use more low-cost competition.
What are your predictions for this merger?