Update: WOW Air has ceased operations, and all flights have been canceled. Icelandair is offering discounted tickets to passengers stranded by WOW.
Iceland-based WOW Air has had a tough road the past several months. The airline has been growing like crazy but hasn’t turned a profit, and now the aviation industry is in an environment where that’s not good enough anymore.
In November 2018 it looked like Icelandair would acquire WOW Air, though that deal ended up falling through. A couple of weeks later it was announced that Indigo Partners (which has invested in quite a few airlines) had signed an agreement in principle to invest in WOW Air.
Everything sounded good, and Indigo Partners even confirmed their intentions to follow through with the investment.
In the meantime the airline has just become a small shell of its former self. The airline has returned all of their A330s, and also several of their A320 family aircraft. The airline has canceled a majority of their US route network, and this summer will operate just four routes to the US, down from over a dozen routes the previous summer.
Well, there’s now an update regarding Indigo Partners’ investment in WOW Air, and it’s not good.
Here’s the notice posted on WOW Air’s website:
The proposed investment of Indigo Partners LLC (“Indigo Partners”) in WOW air has been cancelled by Indigo Partners. Therefore, all negotiations between WOW air and Indigo Partners have been cancelled.
Subsequently WOW air has started discussions with Icelandair Group. The parties aim to conclude the negotiations by Monday March 25, 2019.
So Indigo Partners’ investment in WOW Air has been canceled, and the airline has “started discussions with Icelandair Group.”
We don’t know what happened between WOW Air and Indigo Partners, and we also don’t know how serious the talks are between WOW Air and Icelandair. I do find it interesting that they’re aiming to conclude talks by this Monday, which sure seems fast to me.
I guess we’ll have to wait and see how this plays out, though I can’t imagine it’s good news for WOW Air. At this point I’m frankly not sure what Icelandair has to gain from WOW Air, though I imagine an acquisition would also be really cheap.
What do you make of this situation?