WOW Air, the Icelandic low-cost carrier with the brash slogans and purple planes, got an end-of-the-week rescue bid from a new investor after its merger deal with Icelandair had a crash landing.
Only hours after Icelandair announced it was backing out of the deal over growing financial concerns about WOW, a new investor, Indigo Partners stepped in and announced it would provide new financing and take a stake in the airline’s management. Indigo, which used to own Spirit Airlines, currently owns Chile’s JetSmart and sizable shares of Mexico’s Volaris and Hungary’s Wizz Air.
The airline is known for rock-bottom (but fee-filled) prices between North America and Europe with Iceland as a stopover, but its rapid expansion appears to have outstripped its financing and business, forcing founder and owner Skuli Mogenson into the planned merger.
In recent months, as aircraft lessors and other suppliers became more concerned, financing and cash flow both began to shrink. The airline has dropped several destinations and is returning four of its twenty planes to lessors. It’s so far unclear what changes Indigo’s entry will make in the plans.
