Regional operator Skyways plans to expand within and beyond Scandinavia after acquiring fellow Swedish carrier City Airline.
Skyways' takeover of City doubles the size of the new combined airline, which will operate under the Skyways brand.
Skyways operates largely within Sweden and Norway, while City has in the past two years expanded into a clutch of routes throughout Europe and to Mediterranean holiday destinations.
City's Gothenburg-based network in western Sweden offered an "excellent" complement to Skyways' Stockholm-based operations, with almost no overlap of routes, said Skyways chief executive Lars-Ake Bertilsson.
He anticipates that the newly-enlarged company will expand and larger jets are likely to be acquired. The combined company is now on course to carry more than 1 million passengers annually, he added.
At present, Skyways operates a fleet of 10 Fokker 50 turboprops, with 11 Embraer ERJ-145 regional jets on option, according to Flight's ACAS database. City Airline operates seven ERJ-135/145s, plus three Boeing MD-87s.
"We at City Airline have for a long time seen the need for consolidation and recapitalisation in order to develop further," said City Airline chief executive Jimmie Bergqvist. "It requires large volumes to run a successful airline and Skyways has the financial muscle we need to develop our product. Together we are building a strong airline for the Scandinavian market."
City Airline was the subject of a management buyout from its founder, Lars Magnusson, almost exactly a year ago. Skyways was bought last December by Cyprus-based asset management company Manswell Enterprises.
Little is known of Skyways' owners and "I'm not about to reveal any more information about them", said Bertilsson. He also declined to say how much Skyways had paid for City.