Airline bought and sold


Icelandair acquired a majority holding in Eagle Air in 1978. This company had been established two years earlier, mainly chartering small planes to visiting tourists. After several setbacks it was in a precarious position, and Icelandair bought all the available shares, which gave them a 57.5% holding.

The two companies worked well together. However, one of the conditions of the government assistance package in 1980 was that Icelandair allowed Eagle Air staff to buy back the shares, and the staff association acquired a third of Icelandair’s share, meaning that the parent company now owned 40%. A number of routes were also transferred to Eagle Air. This led to a political struggle in the Icelandic air traffic world.