An official deal has still not been finalised between Wow Air and Indigo Partners as detailed in a statement released by Wow air last night.
The statement assured that Wow air hopes a purchase will be finalised by March 29 at the latest and that no further information will be released at this time.
See Also: Ultimate Guide to Flights to Iceland
Icelandic news outlets reported yesterday that the final requirements set by Indigo Partners with Wow Air had been met. The deadline for these requirements expired yesterday. If an agreement is reached, Indigo Partners will acquire a 49 per cent stake in the company.
Wow Air’s financial difficulties became apparent last October when the Icelandic airline started cancelling routes and offloading aircraft.
On the 5th of November, it was announced that Iceland Air would step in to purchase the budget airline, however, within the month, the deal fell through. The next day Indigo partners agreed to buy Wow air.
Indigo Partners is a firm that specialises in low-cost airlines. Their portfolio currently includes four other airlines. These are JetSmart of Chile; Volaris of Mexico; Frontier Airlines of America; and Wizz Air of Eastern Europe.
After the group expressed interest in purchasing Wow air, some conditions were stipulated. These included; downsizing their fleet from 20 to 11; and cutting the number of destinations Wow air flies to.
As a result of these requirements being met, the number of passengers travelling with Wow air is expected to fall from 3.5 million in 2018, to 2.1 million this year.
To downsize their fleet, the low-cost airline had to back out of a 12-year agreement leasing 4 A330s from an Irish company. Backing out of this lease resulted in a hefty fine.
Wow Air was founded by Icelandic entrepreneur Skúli Mogensen in November 2011. Within a year, Wow acquired the then failing Iceland Express network and by 2015 had expanded to operating in North America and Canada.
In the lead up to Wow Air’s financial troubles, the low-cost airline had received criticism from industry experts for expanding its fleet and destinations too quickly. Locally, the company ended 2018 in an awkward position when it laid off 111 employees as part of the requirements set by Indigo Partners to secure their acquisition.
Wow Air operations as they stand today will remain unchanged, and if the purchase is finalised by the end of March, the future of the low-cost airline seems secure.
Meanwhile, Icelandair signed an agreement today acquiring majority ownership of Cabo Verde Airlines. The company stated that they believe this deal will build the company as a powerful connecting airline between Europe and Africa.