Iceland has canceled an agreement that took place on November 5th to purchase the competing airline WOW Air.
This is two days after WOW Air announced that it is launching a restructuring process involving the withdrawal of four planes from that fleet.
In the press release, the Icelandair Group stated: "[We have] published a stock-exchange publication last Monday, November 26, stating that the company has estimated that it will not be probable that all conditions of the share purchase agreement will be met at the shareholders' meeting on November 30. This situation remains unchanged."
Both sides have agreed to abandon their takeover plans.
The planned Icelandic air WOW air company will not succeed. The boards and directors of the two companies have been working hard on this project. This conclusion is definitely unsatisfactory.Bogi Nils Bogason, President and CEO of Islandeair Group
This led to financially counterbalance Iceland's low-cost carriers WOW Air one step closer to liquidity. Earlier this week, it confirmed that it suffered a decline in sales and published weakened financial projections.
Later on Thursday, the Airport Associates, a WOW Air groundhandling service provider, announced the release of 237 employees,[…] given the uncertainty surrounding the future of the Keflavik airport's aviation market."
After Icelandair invested in WOW Air, the low-cost carrier has announced a new contract on Thursday night, this time with Indigo Partners LCC.
I'm excited to work with Indigo and I'm convinced that this is the best long-term trip for our people and passengers.Skulli Mogensen, CEO of WOW Air
Indigo is a major investor in airlines. It owns several large, inexpensive carriers, including Frontier Airlines and WizzAir. Information about the transaction with WOW Air has not yet been announced.
Read further: WOW Air is launching a restructuring process, going to several planes
This is a development story. More follow.
Aviation journalist from Germany. Chief Editor of the International Flight Network.