Looks like a distressed sale on the part of WW to me.
It's definitely a fire sale. The WOW shareholders might end up with nearly 5% of Icelandair Group but they might also end up with ZERO depending on due diligence. You don't agree to give up your shares with a condition like that unless there's only one buyer and your other remaining option is likely liquidation. The other recipient of equity holds a subordinated loan and they're getting about $5 million in Icelandair shares for that -- almost certainly aurar on the króna.
As far as a merger goes, I doubt that will happen. Group ownership no problem but a merger that results in a 80% Monopoly?
Well, FI & WW have 80% of total traffic at KEF but far under that percentage of passengers starting or ending their trip in Iceland. The Icelandic competition authorities are likely to be less concerned about the broader transatlantic market and WOW had a relatively tiny share of that in any event.
Moreover, the consideration being offered in this merger leads me to believe that Icelandair & WOW will almost certainly invoke the failing firm defense; i.e. without the takeover, WOW would fail anyway, so the impact on competition is the same with or without the transaction. Consequently, it's more beneficial to preserve at least some of the jobs and capacity provided by WOW and avoid the disruption which would be caused by a likely failure of WOW.
They might use Primera a321neos. It would probably be cheaper to fly leased a321neo then old B757.
During the high season, yes. During the low season, the old 757s and 767s have a huge advantage in that they are long since paid-for and can be parked for months without incurring an expensive lease payment. They've also got 7M9s on order and there are very few markets in which the A321neo would be necessary rather than the 7M9 or 7M10 (they likely have rights to substitute if desired). I see the 757s and 767s sticking around for a while simply because they're quite useful for providing peak season capacity while not bleeding cash in the winter.
Sure, but the owner will only get this pittance. I wonder if he even made money on this deal.
I would bet Skuli proves the adage that the best way to become a millionaire is to be a multi-millionaire and then start an airline.