WOW air, the Icelandic low-cost carrier, has been forced to cancel all flights with immediate effect after two potential investors have both walked away from negotiations to help rescue the cash-strapped carrier that flew 3.5 million passengers last year. For the past six months WOW air had been trying to negotiate a deal with rival airline Icelandair and also Indigo, an American private equity firm which has a stake in a number of airlines. The departure of both interested parties left WOW air struggling to organise a successful restructuring package with bondholders and other creditors.
Founded by Icelandic tech tycoon Skúli Mogensen, WOW air started flying in 2012 using smaller, single-aisle planes to fly between Iceland and many destinations in the US and Europe. However today’s news sees it now join a growing list of airlines which have fallen victim to high competition and increased fuel costs, including airberlin, Monarch Airlines and Flybmi, while Norwegian recently launched an emergency US$350 million fundraising and Flybe was rescued by a consortium led by Virgin Atlantic in a cut-price deal.
