US investor Indigo Group came in for WOW after Icelandair walked away from negotiations with the low-cost carrier over an €18 million takeover last November.

However, WOW confirmed last weeks talks with Indigo had broken down, adding it had resumed talks with Icelandair.

Talks between the two Icelandic carriers reopened on Wednesday (March 20) but Icelandair confirmed on Sunday (March 24) it had decided not to invest.

“Icelandair Group has decided its possible involvement in WOW Air’s operations will not materialise,” said the airlines in a joint-statement. “Therefore, all discussions between the parties have ended.”

WOW Air issued a further statement on Sunday raising the prospect of a restructure to shed its debts.

“A majority of WOW Air bond holders and other creditors of WOW Air are in advance discussions with the aim of reaching an agreement on a voluntary restructuring including an agreement of converting current debt into equity and fund the company towards long term sustainability,” said WOW.

WOW currently flies between Gatwick, Stansted and Edinburgh to Iceland and serves North America and continental Europe.

Its aim has been to make Reykjavik a transfer hub, but it has incurred significant losses doing son, including £34 million in the year to June 2018.

However, WOW cancelled its 6.20am Reykjavik-Gatwick service, likely to result in the cancellation of the return leg.

Some transatlantic routes have also been halted, along with Brussels and Barcelona services this week.