Wow Air Announces Details of Potential Indigo Partnership
Icelandic ultra-low-cost carrier Wow Air has released new details regarding its potential partnership with its latest proposed financial savior, private equity firm Indigo Partners. [Update, 3/28/2019: WOW Air has ceased operations. Find our ongoing coverage of WOW Air's collapse, and what affected passengers can do about it, here.]
According to a Jan. 9 letter to Wow Air bondholders obtained by Air Transport World, Wow founder and CEO Skuli Mogensen says Indigo is set to take a 49% stake in the struggling carrier in the form of a convertible loan. Wow has been struggling to get its financial house in order over the past few months, making cuts to both its routes and fleet. Despite its financial strife, Wow has not stopped announcing new cheap fares, like $49 tickets from US cities to Europe.
Indigo partners stepped up at the end 2018 to signal its interest in the Reykjavik-based airline. The latest announcement is now giving more details surrounding that possible arrangement. Under the current agreement, Indigo is set to invest as much as $75 million in Wow. At the time of the first announcement, there was no indication as to how big of a stake in the airline that sum would give Indigo. The loan would have a 10-year maturity, and the total amount invested will depend on the actual needs of the airline. That initial ownership stake could be increased during the term of the loan from Indigo.
The airline and Indigo are still in negotiations on how to deal with a current outstanding loan "from a current shareholder," who is most likely Mogensen, who said in the past he has floated the airline at least 5.5 million euro to keep it afloat. Negotiations are focused around converting that current loan to equity or leaving the loan in place before Indigo finalizes its investment.
H/T: ATW Online
Featured Photo by Wow Air.
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Why We Chose It
The Capital One Venture X Business Card has all the Capital One Venture X Rewards Credit Card has to offer and more. It offers an incredible welcome bonus and requires an equally impressive spend to qualify. In addition, the card comes with premium travel perks like annual travel credit. (Partner offer)Pros
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- In addition, the card comes with many premium travel perks such as an annual $300 credit for bookings through Capital One Business Travel.
- Business owners are also able to add employee cards for free.
Cons
- The card requires significant spending to earn the welcome offer.
- Another drawback is that the annual travel credit can only be used on bookings made through Capital One Business Travel.
- LIMITED-TIME OFFER: Earn up to 400K bonus miles: 200K miles when you spend $30K in the first 3 months, and an additional 200k miles when you spend $150k in the first 6 months
- Earn unlimited 2X miles on every purchase, everywhere—with no limits or category restrictions
- Earn 10X miles on hotels and rental cars and 5X miles on flights and vacation rentals booked through Capital One Business Travel
- With no preset spending limit, enjoy big purchasing power that adapts so you can spend more and earn more rewards
- Empower your teams to make business purchases while earning rewards on their transactions, with free employee and virtual cards. Plus, automatically sync your transaction data with your accounting software and pay your vendors with ease
- Redeem your miles on flights, hotels and more. Plus, transfer your miles to any of the 15+ travel loyalty programs
- Every year, you'll get 10,000 bonus miles after your account anniversary date. Plus, receive an annual $300 credit for bookings made through Capital One Business Travel
- Receive up to a $120 credit for Global Entry or TSA PreCheck®. Enjoy access to 1,300+ airport lounges worldwide, including Capital One Lounge locations and Priority Pass™ lounges, after enrollment
- Enjoy a $100 experience credit and other premium benefits with every hotel and vacation rental booked from the Premier Collection
- This is a pay-in-full card, so your balance is due in full every month