Icelandair has canceled its agreement made on November 5th to buy the rival airline WOW Air.
This comes two days after WOW Air announced that it is entering a restructuring process, including retiring four aircraft from its fleet.
In a press release, the Icelandair Group stated:[We have] issued a stock exchange last Monday, November 26th, stating that the company estimated that it would be unlikely that all the conditions in the share buy agreement would be fulfilled by the shareholders' meeting on November 30th. That situation remains unchanged."
Both parties have agreed to abandon the takeover plans.
The planned acquisition of Icelandair Group of WOW will not go through. The Board of Directors and management of both companies have worked on this project in earnest. This conclusion is definitely disappointing.Bogi Nils Bogason, President & CEO of Icelandair Group
This brought the financially struggling Icelandic low-cost carrier WOW Air one step closer to liquidity. Earlier this week, it confirmed that it suffered from decreased sales and published weakened financial projections.
Later on Thursday, 'Airport Associates', WOW Air's ground handling provider, announced it will lay off 237 employees,[…] due to the uncertainty of the future of the aviation market at Keflavik Airport."
Following the failure of Icelandair's investment in WOW Air, the low-cost carrier has announced a new agreement on Thursday evening, this time with the Indigo Partners LCC.
I'm excited to work with Indigo and I am convinced it is the best long-term move for our people and passengers.Skuli Mogensen, CEO of WOW Air
Indigo is a major investor in the airline industry. It owns several big low-cost carriers, including Frontier Airlines and WizzAir. Details on the deal with WOW Air have not yet announced.
Read more: WOW Air enters restructuring process, retires many aircraft
This is a developing story. More to follow.
Aviation journalist from Germany. Editor-In-Chief of International Flight Network.