A US private equity firm has come to the rescue of ailing budget carrier Wow Air the day Icelandair cancelled a planned takeover.

Indigo Partners, which owns American carrier Frontier Airlines, is also an investor in low cost carriers in Europe and Latin America.

The company revealed last night that it had “agreed in principle” to invest in Reykjavik-based Wow Air. No further financial details were disclosed.

Wow Air chief executive and primary shareholder Skuli Mogensen would remain a principal investor in the carrier on completion of the deal.

Wow Air currently serves 25 destinations across Europe and North America, including links from UK airports to transatlantic routes via Iceland.

Indigo Partners was a lead investor in Tiger Airways in Singapore and Spirit Airlines in Florida, and maintains lead investments in central and eastern

European carrier Wizz Air, Frontier Airlines, Mexico-based Volaris Airlines and JetSMART in Chile.

Bill Franke, managing partner of Indigo Partners, said: “Skuli and Wow’s management and employees have done a remarkable job in creating a well-regarded, successful ultra low cost carrier brand.

“We have a strategic vision for the airline, and look forward to working with its employees and agents to deliver that vision.”

Mogensen said: “The demand for low-cost air service continues to expand rapidly worldwide, and with Indigo as a partner, we hope to take full advantage
of this highly attractive market segment.

“I am excited to work with Indigo and I am convinced it is the best long-term move for our people and passengers.”

Icelandair cancelled the deal for Wow Air after admitting that it was unlikely that all the conditions attached would be fulfilled in time for a shareholders’ meeting today, as previously reported by Travel Weekly.

The breakdown of the agreement follows Wow Air cutting its fleet by two Airbus A320s and two widebody A330 aircraft as part of “necessary restructuring” of the airline and to ensure maximum utility of its remaining fleet.

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