Struggling Icelandic budget carrier Wow Air suspended flights today as it tries to compete a refinancing deal.
The airline announced this morning that all flights have been postponed.
Wow Air had previously revealed plans for a financial overhaul after rival Icelandair withdrew from possible take over discussions for a second time.
This followed US airline investor Indigo Partners, a shareholder in airlines including Wizz Air, cancelling a planned $90 million investment in Wow Air just days earlier.
But the airline said today: “Wow Air is in the final stages of finalising equity raise with a group of investors. All flights have been postponed until documentation with all parties involved have been finalised.
“All passengers have been informed via text message/email to the contact details listed in the booking.
“Passengers scheduled on flights to/from Iceland with Wow Air on Thursday March 28th are entitled to cancel their reservation for a full refund or change their reservation to the next available Wow Air flight.”
The airline promised a further information at 9am today.
But Wow Air was criticised by consumer champion Which? Travel for still accepting bookings while flights have been grounded.
Editor Rory Boland tweeted: “Despite Wow Air cancelling all flights today, with an announcement on its future due at 9am, incredibly it’s still selling tickets on some routes, and appears on flight booking sites.
“If it can’t currently afford to fly its planes it shouldn’t be flogging tickets to passengers.”
Wow Air halved its fleet to 11 aircraft in December in what was described as a “drastic measure” to cut costs following spiralling losses of $33.6 million in the nine months to September 2018.
The carrier has now followed up on a statement issued on Sunday regarding advanced discussions with bondholders about voluntary restructuring including an agreement of converting current debt into equity.
The airline said: “Bondholders have formally approved to convert their bonds into equity and formal discussions with investors have commenced to fund the company.
“This is an important milestone in financially restructuring the company and secure the long-term sustainability of Wow Air.”
No further details of the financial overhaul were disclosed or what impact it would have on the airline’s route network amid rumours of flights cancellations earlier in the week.
The airline was due to switch a daily Gatwick-Keflavik service to Stansted from March 31.
Separately, the Foreign and Commonwealth Office warned of possible disruption to bus and coach services between Keflavik international airport and the Icelandic capital of Reykjavik due to planned industrial action.
“This is likely to last 48 to 72 hours at a time throughout spring 2019 and other airports in Iceland may also be affected.” The FCO said in an updated travel advisory.
“Before travelling, you should contact your bus or coach company for the latest information and factor in any possible delays to your journey time.”
More: Icelandair pulls out of Wow Air rescue talks
