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Another Investor Drops Wow Air Deal -- Here's What Passengers Should Know

March 22, 2019
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3 min read
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Another Investor Drops Wow Air Deal -- Here's What Passengers Should Know
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Wow Air announced Thursday that a badly needed investment from Indigo Partners has been canceled, putting the airline ever closer to financial ruin. After a rapid expansion from 2015 to 2018, the ultra-low-cost carrier has been cutting routes and selling aircraft in order to keep its operations afloat. [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.]

Last fall, it started looking for investors to purchase or invest in the Icelandic airline in order to keep its operation running and find a path toward profitability. It entered negotiations with Icelandair in November, but the two airlines were not able to reach a deal. Then Indigo Partners, a private equity firm run by budget airline veteran Bill Franke and owner of Frontier Airlines, entered the picture and started negotiations to take a 49% stake in Wow.

Wow announced that those talks fell through yesterday and that it has now entered a new round of negotiations with Icelandair.

"The proposed investment of Indigo Partners LLC ("Indigo Partners") in WOW air has been cancelled by Indigo Partners," the airline said in a statement. "Therefore, all negotiations between WOW Air and Indigo Partners have been cancelled."

Wow and Icelandair aim to conclude negotiations by Monday, March 25, 2019. A Financial Times report indicates Icelandair is worried Wow's operation may be completely unsalvageable. The immediacy of the deal may indicate how desperate Wow is to find an investor, and how close the airline is to shutting down.

A lack of demand and a surge in oil prices have put Wow on the path toward financial ruin. Icelandair wanted to buy Wow for $18 million, a massive devaluation of the airline.

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Wow continues to sell dirt-cheap flights between the US and Europe, so be aware that if you do book a ticket with the carrier, it's possible the airline could go belly up if this deal doesn't go through. Purchase a flight with a credit card that comes with trip cancellation insurance and consider other third party trip insurance.

If you've already purchased a Wow Air ticket and the carrier ceases operations, you can initiate a chargeback or dispute with the issuer, as TPG's Ethan Steinberg recently advised one of our readers. "I spoke to representatives from both Chase and American Express on the phone," Ethan wrote, "and while they couldn’t confirm the outcome of any such dispute, they said that paying for a service and not receiving it would give you a very strong case and good odds of getting your money back."

You could also be entitled to compensation of up to 600 Euros (~$680) per person under EU 261, the European Union's bill of air passenger rights. The rule requires airlines flying to destinations within the EU to get you to your final destination or refund you the cost of your ticket.

For more information, see:

What You Can Do When Your Airline Goes Belly Up

Will My Credit Card Issuer Refund Me If My Airline Goes Bankrupt?

Featured image by AFP/Getty Images

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  • Packed with credits foodies will enjoy
  • Solid welcome bonus

Cons

  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber and other dining credits
  • You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
  • Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
  • Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
  • Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
  • $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
  • $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
  • $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
  • Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
  • No Foreign Transaction Fees.
  • Annual Fee is $325.
  • Terms Apply.