Icelandair does not take over WOW Air / WOW Air gives up 4 aircraft
What should have been the purchase of the year, turned into a disappointment for both airlines. It's Icelandair and WOW Air.
In early November, the international press announced a new transaction on the airlines market. Icelandair announced it wants to take over the low-cost rival, WOW Air. But this hill fell.
On 29 November 2018, both airlines announced that the acquisition process has been halted. What was to be the year's commercial aviation transaction turned into a disappointment for both airlines in Iceland.
Icelandair doesn't take over WOW Air anymore
Icelandair wanted to take over WOW Air, with the plan to keep both brands and each company operating on already defined market segments. But the conditions for the purchase of shares were not met. In conclusion, both airlines thanked each other for how they worked on this project.
As a result, each airline will continue to operate independently. Unfortunately, the most wrinkled is WOW Air. Starting in September, leasing companies and lenders have demanded tougher payment terms, putting pressure on the cash flow of WOW Air.
WOW Air gives up 4 aircraft
WOW Air officials announced a resize of the fleet. 4 aircraft, 2 x A320 and 2 x A330 returned to the leasing companies. By reducing the fleet, WOW Air is unable to honor all flights.
Delays or cancellations cause significant damage to the Icelandic carrier, who already has liquidity issues anyway. WOW Air CEO is looking for solutions. Let's see if he'll find them.
Unfortunately, this is the airlines market. A wrong move and bankruptcy knocks on the door. Aggressive expansion can be beneficial in the short term, but in the long term the situation must be managed very well.
Let's not forget the most resounding bankruptcies in the industry, lately: Primera Air and Monarch Airlines. Hopefully WOW Air will continue to fly.