ICELANDERS MAKE MOVE TO CONTROL SCANDANAVIA

Iceland Express have now become part of the of the 4th largest airline group in Europe following the purchase of Maersk Air by Icelandic investment house Fons Eignarhaldsfelag hf.

The purchase was lead by Palmi Haraldsson and Johannes Kristinsson who recently acquired control of Sterling for £40 million. This latest move is part of a strategy aimed at providing cost effective travel across short and medium range destinations in Europe.

Palmi Haraldsson commented. “Maersk Air was Sterling’s main competitor, so the acquisition was a strategic move to strengthen Sterling by merging the two rival services. This is a competitive business, but our growth will enable us to tackle any competition head on and develop new markets”.

The pair held significant shares in Icelandair until 2004, when they sold out to purchase Iceland Express, who had successfully managed to challenge Icelandair’s monopoly on the Iceland – Reykjavik and Copenhagen – Reykjavik route, proving the need for their service.

Birgir Jónsson, Managing Director of Iceland Express commented. “The group’s new investment will give Iceland Express access to a bigger network across Europe and enable us to provide our customers with even more cost effective connections”.

Maersk Air will surrender its name and its planes will be re-branded with the Sterling colours. There are no plans to merge Iceland Express and Sterling, as the two services operate in different markets, however, further links will be developed. The group will collectively carry an estimated 5.2 million passengers annually throughout Europe.

Despite initial scepticism towards Iceland Express, the service has succeeded where others have failed, doubling its flight service since launch. Following the takeover Fons Eignarhaldsfelag hf in February 2005 the service is now selling fares on a new route to Frankfurt.