Indigo Partners has a preliminary agreement to purchase Wow Air, a deal coming less than a day after Icelandair Group pulled its offer to buy the beleaguered low-cost carrier.
The Phoenix-based private equity firm, which has stakes in Frontier Airlines, Volaris and Wizz Air, will complete its due diligence of Wow before the deal can close, Indigo says in a statement. Terms were not disclosed.
Indigo is known for its successful investments in ultra low-cost carriers. Spirit Airlines' turnaround from a small leisure carrier in the eastern USA to a national ULCC is one of its more successful investments.
"Wow's management and employees have done a remarkable job in creating a well-regarded, successful ULCC brand," says Bill Franke, managing partner of Indigo, in a statement. "We have a strategic vision for the airline, and look forward to working with its employees and agents to deliver that vision."
Icelandair was due to acquire Wow under a deal reached earlier in November. However, the airline scrapped the deal today when it was unable to meet a number of "pre-conditions" at its shareholder meeting.
Wow has faced a number of challenges in recent months. It returned four aircraft to lessors earlier this week following the erosion of its financial performance since September. It attributed the issues to a number of factors, including high fuel prices and the collapse of long-haul low-cost carrier Primera Air in October.
The carrier said it was actively seeking long-term funding to continue operations on 27 November, a move that was a "necessity for the business".
Wow has ended service to at least five US destinations, including Cincinnati, Cleveland, Dallas/Fort Worth, New York John F Kennedy and St Louis, since this summer, FlightGlobal schedules data shows.
The ULCC operates 16 aircraft – one Airbus A320neo, 14 Airbus A321 and A321neos, and one Airbus A330-300 – following the aircraft return this week, Flight Fleets Analyzer shows.