Maersk Air and Sterling are to be merged into the largest low-price airline in the Nordic region and the fourth largest in Europe, after Icelandic investment company Fons Eignarhaldsfelag bought A.P. Møller-Mærsk's carrier on Thursday.
Daily newspaper Jyllands-Posten reported that Fons, which bought Sterling in March, had taken over all activities in Maersk Air to combine the companies in a new carrier.
Mærsk said that it had found it difficult for some time to turn a profit on Maersk Air, but that new owners should help it to survive in the tough competition on the air traffic market.
Sterling said in a press release that competition on the market had become so fierce in recent years that most carriers were struggling to satisfy requirements for profitability. This has also been the case for Sterling and Maersk Air, but the merger was meant to change that.
Sterling said the merged company was to turn in an operating surplus by the end of 2006. Sterling alone was to turn around its performance by the end of 2005.
'From being two companies steeped in a particularly difficult competitive environment, with an unsure future as a result, the merger provides the basis for single company with the opportunity for growth and profitability,' said Almar Örn Hilmarsson, CEO of Sterling and the merged company.
A.P. Møller-Mærsk will continue to own the existing aircraft, which will be leased and operated by Sterling.
The companies did not disclose the sale price.
Sterling, however, said that the merger would turn it into the largest low-cost carrier in the Nordic region and the fourth largest in Europe.
'We will grow, but profitability is of vital importance so we will be rationalising and boosting the efficiency of both companies,' Hilmarsson said. 'We will simply build up a new organisation, which will have its own identity.'
Sterling will operate 30 aircraft and fly to approximately 80 destinations.
The location of the headquarters for the new organisation has not yet been decided.