Icelandair canceled its agreement on November 5 for the purchase of rival airline WOW Air.
This happens two days after WOW Air announced that it was entering into a restructuring process, which includes the retirement of four aircraft from its fleet.
In a press release, the Icelandair Group said:[We have] published the issue of shares on Monday, November 26, in which it is reported that, according to the company's estimates, it is unlikely that all the conditions of the share purchase agreement will be fulfilled by the shareholders meeting on November 30. This situation remains unchanged."
Both sides agreed to abandon takeover plans.
The planned acquisition of Icelandair Group WOW air will not work. The board of directors and the management of both companies worked on this project seriously. This conclusion is certainly disappointing.Gods Nils Bogason, President and Chief Executive Officer, Icelandair Group
This led Iceland-Icelandic low-cost carrier WOW Air to move one step closer to liquidity. Earlier this week, he confirmed that he was suffering from declining sales and published weak financial forecasts.
Later Thursday, Airport Associates, a ground service provider for WOW Air, announced that it would fire 237 employees,[…] due to the uncertainty of the future aviation market at Keflavik airport."
After the failure of Icelandair's investment in WOW Air, the low-cost carrier announced a new agreement on Thursday evening, this time with Indigo Partners LCC.
I am very happy to work with Indigo, and I am convinced that this is the best long-term step for our people and passengers.Skuli Mogensen, CEO of WOW Air
Indigo is a major investor in the airline industry. He owns several major low-cost carriers, including Frontier Airlines and WizzAir. Details about the deal with WOW Air has not yet been announced.
Read more: WOW Air enters restructuring process, dismisses several aircraft
This is a developing story. More to follow.
Aviation journalist from Germany. Chief editor of the International Aviation Network.