This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
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.
With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Chase Sapphire Preferred named "Best Credit Card for Flexible Travel Redemption" - Kiplinger's Personal Finance, June 2018
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards