WOW air Might Have a Savior After All: Firm Behind Frontier Airlines Places a Bid
Another day, another twist in the financial troubles of WOW air as its future is in doubt.
At the start of the month, Icelandair was set to acquire its struggling Icelandic competitor. On Tuesday, WOW air returned four leased planes to their owners – never a good sign – and its CEO penned a letter to shareholders that painted a dire picture of its hopes for survival.
By Thursday, Icelandair and WOW called off the takeover bid, saying there simply wasn’t enough time to complete the deal. WOW air looked to be in a death spiral. But now, a glimmer of hope.
WOW air announced late Thursday that U.S.-based private equity firm Indigo Partners has agreed to invest in the airline. This is all still early, and this deal may fall apart just as the Icelandair takeover did. There are few details available about Indigo’s potential investment – only that WOW air CEO Skuli Mogensen will remain a “principal investor” in the company.
But Indigo Partners isn’t some no-name hedge fund. It knows how to make airlines work, so this is an encouraging sign.
Indigo Partners’ owner, Bill Franke, was once dubbed “the architect of the low-cost airline industry.” Indigo Partners owns Frontier Airlines, the ultra-budget U.S. carrier. It helped shape Spirit Airlines and make it profitable before selling off its stake. It has a hand in other low-cost carriers Mexico, Chile and Hungary.
Whatever you might think about those airlines – and we have strong feelings about Spirit – they’re not on the brink of collapse.
“WOW’s management and employees have done a remarkable job in creating a well-regarded, successful ULCC brand,” Franke said in a statement. “We have a strategic vision for the airline, and look forward to working with its employees and agents to deliver that vision.”
Translation: WOW air has established itself as a budget airline to fly between the U.S. and Europe, but it’s failing as a business. We can make it actually work.
Following WOW air’s fate is starting to feel like watching a ping pong match.
It’s too early to declare that WOW air is out of the woods. There’s still plenty of analysis to be done – and plenty of time for Indigo Partners to back out if it shows WOW air is beyond saving.
When the Icelandair takeover fizzled out, we told travelers with flights booked on WOW air to start considering alternatives. And to look into refund policies or any trip insurance offered by the credit card used to book.
That’s still sound advice. But above all, keep following this story. If and when this latest buyer’s offer goes through, you’ll know your upcoming WOW air flight is safe.
This story isn’t over yet. But travelers booked on WOW air can breathe a little bit – for now.
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer.