Icelandair May Buy A 49% Stake In Azores Airlines

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While Icelandair and Azores Airlines are from very different islands in terms of climates, they operate similar business models. Both airlines offer passengers the opportunity to fly between North America and mainland Europe with a stop at their hub airports at no additional cost. Both the Azores and Iceland are gorgeous, so this is a fantastic opportunity to visit some pretty awesome places while also scoring a deal on airfare.

While Icelandair’s route network is well developed and the airline is doing well, the same can’t be said for Azores Airlines. Azores Airlines is tiny, but somehow has managed to rack up about 250 million USD in debt, and is on the verge of not being able to pay their employees. For several months the airline has been looking for new investors, as they’re desperately in need of a capital injection.

On the plus side, at least Azores Airlines is generally moving in the right direction at the moment. They historically had A310s in their fleet, which were incredibly fuel inefficient and unreliable, so they had high operating costs and tons of cancelations. The airline is now taking delivery of much more fuel efficient A321 aircraft, which will allow them to lower operating costs and have a more reliable schedule. This should solve many of their problems, though they’re such a small airline, and keeping up with their debt payments is tough.