Budget airline Iceland Express may have to be sold if Icelandair's talks to take over Sterling are successful.
Company officials have said that worries over competition issues could force a sale of the budget carrier.
Iceland Express and Sterling are both owned by a company controlled by Palmi Haraldsson and Johannes Kristinsson, who held major stakes in Icelandair in the past, Reuters reported.
Haraldsson and Kristinsson have been offered shares in Icelandair in exchange for Sterling.
