Icelandair-WOW Air merger: impacts Keflavik Airport and others

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Iceland's mammoth tourist boom could not last forever. Despite a huge increase in demand over the last eight years, and aviation capacity increases to match, a variety of factors has slowed the growth. This comes at a time when Keflavik Airport has plans for a significant expansion.

The two major airlines, the quasi-FSC Icelandair and the upstart LCC WOW Air, have both been suffering this year and their merger would have come as no great surprise to Iceland-watchers; only its timing, which suggests that their future prospects might have been worse than envisaged.

Much has been written already about the merger. This report addresses the impact on Keflavik Airport and, by implication, on the downtown domestic airport and others in Iceland's far-flung regions.

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