Phoenix, Arizona-based Indigo Partners has abandoned plans to acquire a major shareholding in troubled Icelandic carrier WOW air.
In a statement on the WOW Air's website, the firm said: "The proposed investment of Indigo Partners LLC in WOW air has been cancelled by Indigo Partners. Therefore, all negotiations between WOW air and Indigo Partners have been cancelled."
WOW air has been struggling for some time in the face of rising costs, network complexity and low-fare competition.
WOW air has cut its fleet from 20 to 11 aircraft as it struggles to return to profitability. (Anna Zvereva)
Earlier this year it cut back its operations dramatically, returning almost half of its aircraft including Airbus A330s and A320s to lessors and trimming routes. The airline also made around one third of its staff redundant as it moved back towards it roots.
Indigo Partners has substantial interests in Frontier Airlines in the USA, JetSmart in Chile, Wizz Air in Europe and Volaris in Mexico, stepped in during December when discussions over a potential merger between Icelandair and WOW air broke down. The US firm proposed to inject ISK 9.4bn ISK ($75.88m) in the WOW Air subject to certain conditions being met. Negotiations were originally expected to be completed by the end of February, but were subsequently extended into March.
With the news that Indigo's acquisition of 49% of WOW air has been abandoned, the Icelandic carrier has said that discussions with Icelandair Group have recommenced with the aim of concluding an agreement by March 25, 2019.
Text © The Aviation Oracle