WOW air saved by Indigo Partners

Indigo’s existing protfolio

Troubled Icelandic airline WOW Air is to recieve direct investment from specialist investment firm Indigo Partners, who have created a significant portfolio in low cost airlines.

The amount and terms are yet to be publicised, but Indigo Partners already has a stake in Mexican airline Volaris, US operator Frontier, East European carrier Wizz, and Chilean Get Smart.

Original founder Skuli Morgensen will remain as the principle shareholder, and more details on Indigo’s involvement will be forthcoming as the fine details are agreed.

These things do not happen overnight so it must have been with considerable foreknowledge from Icelandair that they would drop their investment, which was share-based only, providing no cash. Indigo must have been lurking in the wings with the ready money well before this, suggesting that WOW was far closer to the edge of insolvency than is likely to be public knowledge.

Indeed I would go as far to say that without immediate investment WOW may have collapsed days ago and the withdrawal of Icelandair was in full knowledge of Indigo’s willingness to step in. Icelandair would rather have a stable airline on its doorstep than a bankruptcy, that would have inevitably given it a huge headache and seen its own bookings collapse, in turn causing it a great deal of damage it could ill afford.