And so the inevitable happened. On December 13, 2018, Icelandic ultra low cost carrier WOW air confirmed it is entering restructuring, cutting fleet almost by half and laying off hundreds of its employees. The airline notes it is a temporary measure while discussions with potential investor Indigo Partners progress.

WOW air is selling four A321s and negotiating with lessors the return of “some of its” aircraft, that includes A330s. In total, the aim is to cut the single aisle Airbus fleet by almost a half - to eleven aircraft from 20, the ULLC notes in a statement. Trimming of the fleet should not affect Wow’s schedule for the remaining 2018, but changes are coming starting January 2019 - including cancelled flights.

The airline has also began the staff layoffs with the goal to keep around thousand of employees. So far, 111 people have been fired, while contracts of contractors and short term staff are not going to be renewed.

“This is the most difficult day in the history of WOW air. We have dedicated people who have worked hard to make WOW air a reality and it breaks my heart to downsize the company. However, in order to ensure our future and preserve WOW air in the long run, we unfortunately must take these drastic measures,“ Skuli Mogensen CEO and founder of WOW air is quoted as saying in a company’s statement.

At the end of November 2018 Icelandair Group has unexpectedly withdrawn from WOW air acquisition, having announced it just three weeks earlier.

Icelandair Group has walked away from its plan to take over home-based Wow air. In an unexpected announcement on November 29, 2018, the Group stated that the acquisition of the budget carrier, based on a purchase agreement that was signed just three weeks ago, has been cancelled.

WOW air has experienced rapid growth in recent years. Since it was established in 2011, the budget carrier has successfully expanded with destinations across Europe, North America and Asia, carrying approximately 2.8 million passengers in 2017, and expecting 3.6 million travelers in 2018, as the airline itself states.

But things have slowed down significantly. In August 2018, a leaked presentation revealed the airline was seeking investors, as it suffered a $13.5 million loss in 2017 and was bracing for another $28 million downfall in 2018, local media reported at the time.

In its latest, third quarter 2018 financial results, released on October 31, 2018, the company indicated low airfares, decrease in load factor and high fuel prices as reasons behind the staggering 36% drop in profit compared to same period last year, as well as a 26% fall in EBITDA.

Recent development calls for more concern. Having launched flights to three new destinations in the U.S. in May 2018, WOW air announced on October 17 that it is already cancelling the routes.

In November 2018 WOW air has already made first fleet cuts, letting go of four planes: two Airbus A320-family aircraft and two A330-300s. The airline said it was downsizing its fleet “in cooperation with its lessors”.