WOW Air postponed all its flights on Thursday morning (March 28) as its well-documented financial troubles appeared to reach a nadir.
Passengers travelling with the Icelandic carrier were informed by email and/or text, with the airline promising further information at 9am (10am GMT).
Budget carrier WOW says it is in the “final stages” of securing the fresh investment it requires to resume and maintain operations.
It comes after various long-running talks to shore up its finances, dating to October last year, failed to make sufficient progress.
Said WOW in a statement: “WOW Air is in the final stages of finalising equity raise with a group of investors. All flights have been postponed until documentation with all parties involved have been finalised. Further information will be given at 9am.
“All passengers have been informed via text message/email to the contact details listed in the booking. Passengers scheduled on flights to/from Iceland with WOW Air on Thursday March 28 are entitled to cancel their reservation for a full refund or change their reservation to the next available WOW Air flight.
“WOW Air apologises for the disruption to travel plans.”
The move comes after fresh discussions over the airline’s future got under way on Tuesday (March 26), the best part of five months after initial talks over a potential sale of WOW became public.
US investor Indigo Group came in for WOW after Icelandair walked away. However, WOW confirmed last week talks with Indigo had broken down, and that it had resumed discussions with Icelandair.
Talks between the two Icelandic carriers reopened last Wednesday (March 20) but Icelandair confirmed on Sunday (March 24) it had decided not to invest.
WOW proceeded to consult bondholders over a voluntary restructure, including the prospect of converting existing debt into equity, a move which took a major step forward on Tuesday (March 26).
“Bondholders have formally approved to convert their bonds into equity, and formal discussions with investors have commenced to fund the company,” said the airline in a statement.
“This is an important milestone in financially restructuring the company and secure the long-term sustainability of WOW Air.”
WOW Air flies from Gatwick, Stansted and Edinburgh to Iceland and serves North America and continental Europe.
Its operations are built around Reykjavik’s emergence as a transfer hub, but incurred heavy losses in the year to June 2018 as it sought to expand its operations.