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.
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.
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And it has been struggling in a big way.
- WOW Air cancels route to New Delhi
- WOW uses an Airbus A321 to Los Angeles
- WOW Air returns four long-haul planes
- WOW Air decreased their fleet size from 20 planes to only 11
- WOW Air laid off 111 full-time employees yesterday (Bringing their company numbers down to around 1,000 employees).
“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.
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.
Ultimately it has not yet been revealed what routes will remain, but all shall be revealed in the coming January.
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“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.