Icelandic low-cost airline Wow Air says it has restarted talks with Icelandair after it revealed potential investor Indigo Partners cancelled its bid to acquire the troubled carrier.

Icelandair was the first party to show interest in buying Wow last year, with the proposed deal reported to be worth US$18 million. However, the rival carrier abandoned talks less than a month later after it said Wow would be unlikely to meet the terms of the acquisition.

Within a day, Indigo Partners – which owns Wizz Air, Frontier Airlines, Jetsmart and Volaris – had swooped in with its own offer.

The carrier has since nearly halved its fleet of aircraft and made route cuts to save money. It will be consolidating its London operations by moving its Gatwick flights to Stansted from 31 March.

Wow Air now says all negotiations with Indigo Partners have ceased, but it has subsequently reopened the discussion with Icelandair.

It hopes to conclude talks by next Monday (25 March).

Confirming the news, an Icelandair statement said: β€œThe discussions will be based on the doctrine of competition law regarding the failing firm defence. The discussions will take place in cooperation with the Icelandic authorities.”

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