Icelandair to buy
discount rival Wow

Icelandair has reached a surprise agreement to buy discount rival Wow Air, bringing together the island nation’s two financially embattled airlines.

The carriers will continue to operate under separate brands while aiming to better compete on routes linking Europe with North America, they said Monday. Shares of Icelandair surged on the deal, which will create a combined company with about 3.8 percent of that market.

Both airlines have struggled with slumping tourist visits to Iceland, higher oil prices and the introduction of direct low-cost trans-Atlantic flights by rivals, which have made changing planes en route less appealing. Icelandair said last week it had breached debt covenants and asked bondholders to grant a waiver.

Unprofitable Wow, founded in 2011, had targeted a listing while seeking a partner to see it through the winter slump.

Wow has been working to improve the outlook but was faced with tough decisions, Wow’s founder and chief executive, Skuli Mogensen, said in an email to staff obtained by Bloomberg News.

He acknowledged that the sale to Icelandair would come as a shock to many employees and “was not part of the original game plan.”

— Bloomberg News

Lowe's to shutter
dozens of stores

Home improvement chain Lowe’s announced the closure of an additional 51 underperforming stores in the United States and Canada on Monday as it strives to compete with Home Depot in a slowing housing market.

Lowe’s gave no details of job losses in the move, which closes stores in some upmarket areas including Broadway and Chelsea in Manhattan and follows the shutdown of 99 Orchard Supply stores in California.

Buffeted in recent quarters by the impact of a long winter in North America, Lowe’s has been striving to find ways to catch up with longtime sector leader Home Depot, each of whose stores on average generate almost twice as much in sales.

There are also signs that Americans are spending less on housing as prices and demand peak after a seven-year building spree, although many of the factors underlying the industry’s health remain in place.

While Lowe’s is far smaller and less exposed to the arrival of Amazon and other online sellers, the closures follow a wave of similar moves by traditional U.S. retailers facing online competition.

— Reuters

Also in Business

Federal Communications Commission Chairman Ajit Pai on Monday wrote the chief executives of major telephone service providers and other companies, demanding they launch a system to combat billions of robo-calls. In May, Pai asked companies to adopt an industry-developed "call authentication system" or standard for the cryptographic signing of telephone calls aimed at ending the use of illegitimate spoofed numbers.

Apple has told its smartphone assemblers Foxconn and Pegatron to halt plans for additional production lines dedicated to its new iPhone XR the Nikkei financial daily reported Monday. The report fueled concerns that the iPhone XR, the cheapest of three iPhones Apple unveiled in September, was facing weak demand.

A divided federal appeals court on Monday overturned the insider-trading conviction of a former Wall Street investment banker accused of passing tips about five mergers in the health-care industry to his father, and ordered a new trial. The 2nd U.S. Circuit Court of Appeals said Sean Stewart, who worked at JPMorgan Chase and Perella Weinberg Partners, should have been allowed to challenge a recorded conversation between his father and a friend who was cooperating with prosecutors.

European Union and Japanese plans to form the world's largest free-trade area cleared a significant hurdle on Monday when E.U. lawmakers specializing in trade backed a deal that could go into effect next year. An agreement would bind two economies accounting for about a third of global gross domestic product.

Coming today

10 a.m.: Labor Department releases job openings and labor turnover survey for September.

— From news services