It seems the twists and turns that the history of WOW Air has taken another turn – with Indigo Partners lining up for a possible takeover bid.
The news broke towards the end of last week, shortly after Icelandair decided to not to proceed with the takeover.
So, some of you might be scratching your head on who Indigo Partners are. They’re a Private equity company, and have holding in four airlines:
- Frontier Airlines (USA – Controlling interest)
- Jetsmart (Chile – Controlling Interest)
- Wizz Air (Hungary – holding stake)
- Volaris (Mexico – holding stake)
In fact, they made a big splash at the Dubai Airshow last year with an order for 430 aircraft.
So, in principle – Indigo has agreed to invest in WOW. Unsurprisingly, the terms of the agreement have not been disclosed and are subject to due diligence.
Once this is done, the parties will be working together as soon as possible. It also allows WOW’s CEO and primary shareholder, Skuli Mogensen, to remain a principal investor in WOW once the transaction is complete.
In Quotes
Skuli Mogensen of WOW Air states
“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.”
Bill Franke, Managing Partner of Indigo Partners states
“Skuli and WOW’s management and employees have done a remarkable job in creating a well-regarded, successful ULCC brand,”
“We have a strategic vision for the airline, and look forward to working with its employees and agents to deliver that vision.”
The saviour… and why?
This is an odd move to say the least. As can be seen, there has been a glut of transatlantic capacity recently – with Primera Air shutting up shop and Norwegian cutting capacity. In terms of assets, WOW Air’s fleet is leased (and in effect, Indigo will be investing in the brand, slots and operation).
So the question is why Indigo is interested? Whilst a transatlantic airline to link the various Indigo operations together might make sense, that flies in the face of what a ULCC is (stripping everything to the bone, charging for anything, and throwing away a connectivity model in most respects).
The WOW Air saga is one that seems to go on at this time.
From a passenger perspective, I would still be exercising care when booking, and having back-up plan… in case Indigo walk away..
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