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The future for Iceland’s low-cost carrier WOW Air looks bleak with Icelandair Group scrapping plans to buy out the struggling airline.
- Icelandair confirmed that conditions for the share purchase were “unlikely” to be filled by the company’s shareholder meeting November 30, 2018.
- WOW Air first took to the air in 2012 as a no-frills budget airline offering low airfares, but charged for carry-on luggage, food and drinks.
- However, escalating financial problems began to take their toll after a bond issuance in September, the Icelandic carrier struggling to deal with rising fuel costs.
- Subsequent to this, aircraft lessors and the company’s creditors “demanded stricter payment terms than before, putting further pressure on the company’s cash flow,” WOW air said in a statement on November 27.
- The airline expanded rapidly, helping to fuel a tourism boom to Iceland, but has been beset by other problems including accusations of poor customer service.
- While the airline reduced its fleet of aircraft by four earlier this week, there are no clear indication as to what WOW Air will do next.