Icelandair extends Eastern European reach
The Icelandair Group is to acquire Travel Service, the largest privately owned airline in the Czech Republic, for an undisclosed sum.
Travel Service operates charter flights from Prague and Budapest and also owns and operates low-cost scheduled carrier Smart Wings. It carried a total of 1.8 passengers last year using a fleet of 12 Boeing 737s and reported turnover of €190m (£130m).
In a statement the Icelandair Group said it had signed a letter of intent to purchase 50% of Travel Service’s shares before end-Jun07 and the remainder during 2008.
The acquisition will take the group’s estimated turnover for the year 2007 to 72bn Icelandic kronur (£571m), 30% higher than in 2006. Once the acquisition has completed, Icelandair forecasts annual turnover of more than ISK80bn (£635m).
Commenting on the deal Jon Karl Olafsson, Icelandair Group chief executive, said: ‘This letter of intent is in accordance with Icelandair Group’s intention of growing in the international charter flights sector. We have been looking towards Eastern Europe where we think that we have good business opportunities with our knowledge and experience.
‘Last year we acquired the Latvian airline Latcharter, which has been a success story, and now we take a big step even further in this direction. It is obvious that if Icelandair Group acquires Travel Service, it will grow fast this year. This airline is, regarding number of passengers and fleet, close to Icelandair’s scheduled operations in size.’
In addition to flagship Icelandair, the group operates a further 11 independent subsidiaries including regional carrier Air Iceland, Bluebird Cargo, Icelandair Hotels and inbound tour operator/travel agent, Iceland Travel.
Report by Chitra Mogul
Chitra Mogul
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