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Wow Air runs out of time to seal crucial financing

Indications that Icelandic carrier Wow Air was facing an end-game had emerged when the airline cancelled several inbound services from North America.

These overnight inbound services on 28 March would have connected with early-morning flights heading for several destinations in Europe.

The cancellations appear to leave half the Wow Air fleet on the ground in the USA and Canada.

FlightGlobal analysis indicates at least five Airbus A321s and an A321neo had conducted services to destinations including Montreal, Toronto, Detroit, Boston, New York and Baltimore on 27 March.

Reykjavik Keflavik airport’s official arrivals information shows that all the return services were cancelled.

There is preliminary evidence that at least one other A321 remains in Montreal. Wow Air has yet to confirm the locations and status of its other four aircraft, among them two A321s, an A321neo and an A320neo.

Cirium’s Fleets Analyzer lists an Airbus A330-300 is in storage.

Wow Air had emerged in mid-2012 when it started services to European destinations from Reykjavik, expanding to North America three years later.

This expansion enabled Wow Air to replicate the model of rival Icelandair by offering transatlantic services via Keflavik airport, using a low-cost fare structure.

Wow Air’s ambitions included opening widebody services to broaden its North American route network and it introduced three A330-300s as it built a fleet of around 20 aircraft – of which 80% were on operating lease and the rest on finance leases. Avolon and Air Lease were its largest lessors.

But the airline, which had been operating profitably, started suffering a sharp deterioration in financial performance in 2016 – the year in which it stepped up to services with the larger A330s.

Wow Air had not only leased A330-300s, it had committed to expanding with four A330-900s, the first of which was rolled out in Toulouse last year – but never delivered to the airline.

Increasing expenditure, partly the result of higher fuel prices and exacerbated by weak fares, drove Wow Air to seek funding support.

It entered tie-up discussions with Icelandair and subsequently Indigo Partners, but neither sets of negotiations resulted in an agreement.

Wow Air, which halved its fleet and returned to exclusive single-aisle operations in an effort to reduce its costs, was forced to turn to its bondholders for an urgent rescue plan – which failed to materialise in time.

The carrier ceased operations on 28 March.

Wow Air becomes the second Icelandic-linked carrier to collapse within six months, following Primera Air which had strong ties to the Icelandic tour operator Primera Travel Group.

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