WOW Air Gets A $75m Investment And Will Focus On Shorthaul Routes

It seems WOW Air has performed a Christmas miracle and saved themselves from bankruptcy!

The delightful news hits the worlds as Indigo Partners (owners of several ultra-low-cost airlines) invests $75 million USD into the carrier.

Indigo
The various different airlines of Indigo Partners

What is the story?

Now, the deal is not finalized yet and is still waiting on several conditions to be met, but it is a huge boon for the struggling airline.

And it has been struggling in a big way.

“This is the most difficult day in the history of WOW air. We have dedicated people who have worked hard to make WOW air a reality and it breaks my heart to downsize the company. However, in order to ensure our future and preserve WOW air in the long run, we, unfortunately, must take these drastic measures“ – Skuli Mogensen CEO and founder of WOW air.

But this Indigo Partners deal might just breath new life into the airline. Investors are being contacted and will have to give permission for Indigo Partners to acquire a controlling stake in the company. Previously WOW Air was possibly going to be bought by rival Icelandair, but that deal fell through last month.

WOW Air
WOW Air jet sits with its rivals in Iceland.

What does this mean for WOW Air?

What is super interesting on how this will change WOW Air moving forward. With this money, they will be able to pay back any debts they have, and then use the rest to restructure the organization.

WOW air’s fleet will be reduced from twenty to eleven aircraft, all single-aisle Airbus. WOW air is in negotiations with its lessors to return some of its aircraft including all Airbus A330s. Four Airbus A321s are being sold in a transaction that will improve WOW air’s liquidity by more than 10 million USD. – WOW Air Statement

This means that WOW Air will no longer be a long-haul low-cost carrier, but focus on ultra cheap short-haul routes. It could potentially still fly from its hub in Iceland, linking the east coast of America with Europe for insanely low prices. After all, one just has to look at the deals they offered on Black Friday to get a good idea of just how cheap they can do.

Wow
WOW Air Black Friday Deals

Ultimately it has not yet been revealed what routes will remain, but all shall be revealed in the coming January.

WOW Air Route Map
The previous WOW Air route map from earlier this year. Image: WOW Air

“We are very pleased with the visit from Indigo Partners and it´s clear that we can learn a lot from Bill Franke and his team on how to build a successful low-cost airline.  I don’t think we can find a better and more experienced partner to bring WOW air to the next level” – Skuli Mogensen, CEO and founder of WOW air.

What do you think? Will WOW Air change in a big way? Let us know below.

 

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Sam

I am flying wow to New York in March. How will this affect me

Iceland With Kids

Hi Sam,

WOW just announced that they are going to cancel flights from JFK. So you may have to fly out of Newark if you were scheduled for JFK.

Eric Newman

There’s one important change that gives WOW significant breathing room: plunging oil prices. Oil hit $46 a barrel today, down from $76 just over 2 months ago.

So yes, WOW will emerge as a smaller airline, likely with no flights from the West Coast of the US. But if oil had been this low all year, we might not even be talking about a possible bankruptcy. Low oil prices should allow Indigo to complete their investment and for WOW to continue operating.