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Published on Tuesday, March 26, 2019

Wow Air cancellations continue as rescue deal collapses

Cash-strapped budget airline Wow Air has cancelled more flights today amid fears for the future of the carrier, which confirmed yesterday that a potential rescue deal with rival Icelandair had collapsed.

Icelandair had reopened talks with Wow after the low-cost carrier lost the support of a potential US financial backer last week, but discussions apparently broke down over the weekend.

Icelandair announced on Sunday that 'its possible involvement with Wow Air's operations, as announced on 20 March 2019, will not materialise'.

Chief executive of Icelandair Group Bogi Nils Bogason added: "The financial position and operations are such that we did not see any reason to continue."

Wow Air blamed the cancellation of yesterday's flights to and from London on the late arrival of a long-haul flight, but it has cancelled more flights today, tomorrow and on Thursday.

The airline has been given until March 29 to present a rescue plan to its lenders. It had hoped US private equity fund Indigo Partners would stump up $75 million in exchange for a 49% stake in the airline, but that deal fell through last week.

Following the collapse of rescue talks with Icelandair on Sunday, Wow said the majority of its bond holders and creditors were discussing a voluntary restructuring. It said more information would be released yesterday but no further news was announced.

The airline, which operates low-cost flights from the UK to Reykjavik and onwards to the US and Canada, has been shedding unprofitable routes since late last year. It also plans to axe its Gatwick flights from March 31, focusing on its Stansted operation instead.

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