Article from BTNews 25 MARCH 2019
Wow Air in talks deadline
An announcement on the future of Icelandic carrier Wow Air is expected today, 25 March, with negotiations between the company and Icelandair scheduled to end after resuming last week. The resumption followed US private equity firm Indigo Partners withdrawing its offer to invest.
Icelandair had previously agreed to buy Wow Air but abandoned the plan last November. A day later, Indigo said it had reached a preliminary deal to acquire 49% of Wow Air (BTN 3 December 2018), but this too has now fallen through.
Wow said on Thursday: “The proposed investment of Indigo Partners in Wow Air has been cancelled by Indigo Partners ... Subsequently Wow Air has started discussions with Icelandair Group.”
Icelandair said the discussions “would take place in cooperation with the Icelandic authorities”, while the Icelandic government said it supported the move and was “willing and prepared to use all reasonable efforts to facilitate a positive outcome”.
Privately-owned Wow Air was founded in 2011 to offer low-cost services between Europe and North America via Iceland but reported a pre-tax loss of nearly US$42m (about £32m) for the first nine months of last year.
The airline launched a major restructuring project in a bid to ensure survival, cutting its fleet from 20 to 11 and dropping several destinations, including those to the US.
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Alan Bowen, RYE
Icelandair announced their withdrawal on Sunday evening, there never were obvious synergies since they used entirely different aircraft and Wow dragged Icelandair down to a loss as prices tumbled. It would be a brave man (or woman) that would take a chance on Wow now unless there is a miracle