This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
It’s been a rough end of the year for WOW Air. After quickly expanding to markets across the US, the ultra-low-cost carrier has cancelled a slew of routes as fuel prices have increased and routes haven’t performed as well as expected. New York’s JFK, Dallas, St. Louis, Cleveland, Cincinnati and Tel Aviv routes have been causalities of WOW Air’s retraction so far.
[Update, 3/28/2019: WOW Air has ceased operations. Find our ongoing coverage of WOW Air’s collapse, and what affected passengers can do about it, here.]
Perhaps on the verge of going under — as we saw fellow transatlantic low-cost carrier Primera Air fail in October — WOW Air seems to have found a savior right in its own backyard. Fellow Icelandic low-cost carrier Icelandair is acquiring WOW Air. Current WOW Air shareholders will receive a 5.4% stake in the resulting Icelandair Group.
Before this deal is completed, it must be approved at an Icelandair Group stockholders meeting and get regulatory clearance from the Icelandic Competition Authority.
As part of the announcement, Icelandair Group CEO Bogi Nils Bogason confirms that the two airlines will “continue to operate under their own brands and operating approvals.” However, combining forces would allow the two airlines to divvy up markets to see where Icelandair’s slightly more premium service or WOW Air’s bare-bones fee-heavy service — or both — makes the most sense. Or, in corporate speak, this deal will offer “many opportunities for synergies with the two companies.”
The approval from Icelandair Group shareholders might be a shoo-in given the stock market’s reaction to the news. Before the deal was announced, a 5.4% stake (272,341,867 shares) in the Icelandair Group was worth 2.18 billion Krona (USD $18 million). However, with the Icelandair Group stock currently up as much at 50% in trading Monday, the value WOW Air’s shareholders would get from the deal has also surged 50%.
While both Icelandair and WOW Air have made a splash on transatlantic market with their surprisingly-low fares, the two Icelandic airlines currently only account for a combined 3.8% share of the transaltantic market — with legacy airlines still controlling most of the lift.
This post has been updated with a corrected currency exchange rate.
Know before you go.
News and deals straight to your inbox every day.
WELCOME OFFER: 60,000 Points Terms Apply.
TPG'S BONUS VALUATION: $1,200
CARD HIGHLIGHTS: Delta Sky Club and Centurion lounge access, $200 annual airline fee credit and up to $200 in Uber credits annually
- Earn 60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months.
- Enjoy Uber VIP status and free rides in the U.S. up to $15 each month, plus a bonus $20 in December. That can be up to $200 in annual Uber savings.
- 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel.
- 5X Membership Rewards points on prepaid hotels booked on amextravel.com.
- Enjoy access to the Global Lounge Collection, the only credit card airport lounge access program that includes proprietary lounge locations around the world.
- Receive complimentary benefits with an average total value of $550 with Fine Hotels & Resorts. Learn More.
- $200 Airline Fee Credit, up to $200 per calendar year in baggage fees and more at one qualifying airline.
- Get up to $100 in statement credits annually for purchases at Saks Fifth Avenue on your Platinum Card®. Enrollment required.
- $550 annual fee.
- Terms Apply.
- See Rates & Fees