Wow Air Averts Takover from Icelandic...F9's Parent Takes Stake
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Private equity firm Indigo Partners is set to invest in low-cost carrier Wow air following the collapse of Icelandair’s proposed takeover of its Icelandic counterpart.
A deal has been agreed in principle and the two parties hope to close the transaction “as soon as practicable”. Skúli Mogensen, Wow’s chief executive and founder, will remain a principal investor following completion.
Details of the proposed investment were announced just hours after Icelandair confirmed that its planned takeover of Wow had been abandoned as the two parties were unable to meet the conditions for the purchase.
Mogensen said: “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.” He added that the deal was the “best long-term move” for its staff and passengers.
Indigo Partners is led by managing partner Bill Franke, an aviation industry veteran. The firm currently owns Frontier Airlines and has stakes in JetSMART in Chile, Mexico’s Volaris and Wizz Air of Hungary. It previously was a lead investor in Tiger Airways based in Singapore and US carrier Spirit Airlines.
“Skúli and Wow's management and employees have done a remarkable job in creating a well-regarded, successful ULCC brand,” Franke said.
“We have a strategic vision for the airline, and look forward to working with its employees and agents to deliver that vision.”
In November 2017, Indigo Partners placed a huge order with Airbus for 430 additional A320neo Family aircraft. The deal, which was the most planes ever sold by Airbus in one batch, comprises 273 A320neos and 157 A321neos.
Speaking at the time, Franke said the order underscores the firm’s “optimistic view” of the growth potential of its family of low-cost airlines.
