Icelandair group has cancelled their plans to take over the budget Icelandic Airline WOW Air.

According to Flight Global, pre-conditions for a shareholders meeting relating to the acquisition, due to be held November 30th, were not met.

Chief executive of WOW Air, Skúli Mogensen, has stated on the matter, “It was clear at the outset that it was an ambitious task to complete all the conditions of the share purchase agreement in this short period.”

At the beginning of the week, trading of Icelandair shares was suspended at the request of the Financial Supervisory Authority, leading to Icelandair group having to renegotiate the trading terms with their shareholders. That day, Monday 26th November, Icelandair group released a statement that it was unlikely the conditions of the purchase agreement would be met.

Now, just days later, Chief executive of Icelandair Group, Bogi Nils Bogason, has claimed the situation is “disappointing” and that the acquisition “will not go through”.

CEO of WOW Air, Skuli Mogensen

Skúli Mogensen founded WOW Air in 2011. Credit: Wow Air Facebook.

As taken from Icelandair group’s statement, “Due to this situation, both parties agree to abandon the aforementioned purchase agreement”. There are no plans of a deferral on the decision, nor to postpone cancellation of the project any further.

This puts the future of WOW Air in serious doubt, with the chance of bankruptcy looking ever more likely. According to the news outlet, Morgunblaðið, Skúli Mogensen is in talks with prospective investors, though gave no indication as to whether this investment would come from foreign or local sources.

Though media was denied access to a WOW Air staff meeting held this morning at their offices in Höfðatorg, it is understood that an email to employees was sent by Skúli Mogensen telling them to expect positivity in the meeting. According to Guide to Iceland Now sources, however, there is some concern amongst WOW Air employees that they will not be paid their wages this Friday, despite assurances from Skúli. It appears that trust in their CEO has taken a further nosedive with this week’s cancellation of the acquisition. 

This follows from our previous story, Breaking News: Icelandair buys WOW Air.  Make sure to tell us your thoughts on the latest news in the Facebook comments box below.