Investor Skúli Mogensen announced yesterday that he has acquired part of the operations and scheduled flights of Iceland Express, which will be taken over by his airline, WOW Air. Skúli says layoffs are unavoidable but part of Iceland Express’ staff will likely be offered positions at WOW Air.Keflavík International Airport. Photo copyright Icelandic Photo Agency.
“I’m very satisfied with the move and believe it will significantly strengthen our position in the great competition in aviation,” Skúli states, according to Morgunblaðið.
The rationalization that comes with takeover will lead to fewer flights than currently offered by both airlines. “I will stress good frequency to key destinations… to provide stable and secure service,” he adds.
“There will hardly be any disruption for passengers following the takeover and we naturally intend to guarantee all-round service for them,” the investor concludes.
Owner of Iceland Express Pálmi Haraldsson says in a statement that continued losses are the reason for the sale; the airline lost ISK 2.7 billion (USD 21 million, EUR 17 million) in 2012 and losses have also been reported this year.
After the takeover, which is dependant on the agreement of the Competition Authority, two airlines will be operated in Iceland, as before WOW Air was founded.
Iceland Express was founded in 2003 and gradually increased the number of destinations to 16. The number of passengers has grown from 136,000 in 2003 to 500,000 in 2011.
WOW Air was founded by Skúli in 2011 and the airline has offered scheduled flights to seven destinations since last spring.
The airlines have been in tough competition. Former managing director of Iceland Express, Matthías Imsland, was hired to WOW Air and Pálmi, the owner of Iceland Express, accused him of having stolen confidential information from the airline, ruv.is reports.
Earlier this year, WOW Air accused Iceland Express for tapping their phones at Keflavík International Airport.
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