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Don’t count Wow Air out just yet.

Even though the struggling ultra-low-cost carrier has been cutting routes, selling off 20% of its fleet and attempting to negotiate a failed buyout from Icelandair, it might have found a new financial savior willing to step up in the nick of time to save the airline from a seemingly imminent demise.

Indigo Partners, the private equity firm that owns budget airline Frontier, said Thursday it plans to buy a stake in the faltering Reykjavik-based carrier. The two aviation groups said they have reached a preliminary agreement, the specific terms of which were not disclosed. But if the deal goes through after due diligence, Wow’s CEO Skuli Mogensen would remain the airline’s primary shareholder.

National flag carrier Icelandair had originally offered to buy Wow, but its preliminary purchase agreement laid out several stipulations that the purple-liveried carrier had to complete by the Icelandair shareholders’ meeting on Nov. 30 or the deal would not go through. And it seems that Wow wasn’t able to hold up its end of the bargain.

Now the question is whether the airline’s shaky balance sheets, exacerbated by the recent record-high cost of jet fuel, will pass Indigo Partners’ due diligence.

If it can manage to cement the private equity investment, Wow will be in capable hands.

Indigo Partners not only owns Frontier, but also invested in fellow ULCC Spirit Airlines when it was struggling, and is widely credited with turning around the airline’s bottom line. Spirit is now one of the most profitable airlines in the ultra-budget sector, posting a third quarter net income of $97.5 million in 2018.

“We have a strategic vision for [Wow], and look forward to working with its employees and agents to deliver that vision,” Bill Franke, managing partner of Indigo Partners, said in a statement.

The firm is also currently a lead investor in international ultra-low-cost carriers Wizz Air, Volairs and JetSMART.

Featured image courtesy of WOW Air.

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