WOW Air has been thrown a possible lifeline after Icelandair pulled its investment offer.
Yesterday, WOW CEO Skuli Mogensen emailed staff to say the Icelandair deal had fallen through, but he planned to keep the airline running as an independent company.
Later that day, Indigo Partners, a Phoenix-based investment firm with stakes in Frontier Airlines and other low-cost carriers including Wizz Air, said it has reached a preliminary agreement to invest in WOW.
The plan is for Mogensen to remain a principal investor after the deal.
Bill Franke, managing partner of Indigo and former chairman and CEO of America West Airlines, praised WOW and Mogensen, saying they have done a ‘remarkable job’ in creating the ultra low-cost carrier.
He added: "We have a strategic vision for the airline, and look forward to working with its employees and agents to deliver that vision."
Icelandair had signed a purchase agreement to buy WOW on November 5, but last Monday the group issued a stock exchange release stating that the company believed it would be unlikely that all the conditions in the share purchase agreement would be fulfilled by the shareholders’ meeting on Friday.
An announcement from Icelandair added: "Therefore, it is unlikely that the Board of Directors of Icelandair Group can recommend to the shareholders that they agree to the purchase agreement.
"Furthermore, the Board does not intend to submit to the shareholders’ meeting a proposal to postpone decision-making on the purchase agreement. Due to this this situation, both parties agree to abandon the aforementioned purchase agreement."
