The Copenhagen-based, Icelandic investment house FL Group now owns 5.98% of the share capital of AMR Corporation, the parent company of American, American Eagle and The AmericanConnection airlines. The group has been building its stake for a considerable period and its total investment now exceeds US$400m, making it the third largest investor in the airline.
FL Group has earned a reputation in the European capital markets for its investments in the airline industry which make up 25% of its US$3.4bn portfolio. FL Group’s previous airline investments include: Sterling Airlines, Scandinavia’s largest low-cost airline and a 23% stake in Finnair, the Finnish Flag Carrier. FL Group is also the former sole owner of Icelandair, the Icelandic Flag Carrier, and former owner of a 16.9% stake in easyJet, one of Europe’s largest low-cost airlines with head offices in the UK.
FL Group has had considerable success with its investments in the airline industry. On its easyJet stake, the company made a profit of US$190m when it was sold in April 2006 and on its stake in Icelandair, FL Group made a profit of US$400m in October 2006.
Hannes Smarason CEO and 19% owner of FL Group, predictably, said: “We believe AMR Corp. is well positioned to take advantage of the growing US air travel market. The supply-demand balance has improved considerably over the last several years and the company enjoys one of the best positions in the industry to take advantage of that as well as to build auxiliary revenues. We are excited about this investment.”
In related news, FL Group hired Orvar Kaernested as managing director of the firm’s Private Equity and Strategic Investments division. Previously Kaernested was the deputy head of Kaupthing’s Investment Banking. Kaernested will be based at FL Group’s offices in London. Simultaneously, Jon Sigurdsson was promoted to deputy CEO of FL Group where he was previously the managing director of Private Equity and Strategic Investments. Sigurdsson is charged with operational development and investments, primarily in banking and financial services