by Mia Taylor
Last updated: 3:21 PM ET, Fri November 30, 2018
Reversing course from announcements made earlier this month, Icelandair is abandoning plans to purchase Wow Air.
A purchase agreement that was signed on November 5th, has been canceled, according to a statement issued by Icelandair. Both parties agreed on this outcome.
Icelandair Group said in its statement that it would be unlikely that all of the conditions in the share purchase agreement could be fulfilled by its shareholders' meeting on November 30th. As a result, the Board of Directors of Icelandair Group would not be able to recommend to shareholders that they agree to the purchase, the statement said.
The statement added that the board does not intend to submit a proposal to the shareholders' meeting to postpone decision-making on the purchase agreement.
"Due to this situation, both parties agree to abandon the aforementioned purchase agreement," said the statement.
The purchase of financially troubled Wow Air was valued at about $18 million, according to the Associated Press.
The rival Iceland-based budget airline, known for its cheap flights between the U.S. and Europe, now faces an uncertain future.
Earlier this week, it returned four planes to leasing companies, the Associated Press reported. Higher fuel prices have dominated much of 2018, creating a challenging environment for airlines.
"This conclusion is certainly disappointing," Bogi Nils Bogason, interim president and CEO of Icelandair Group, said in a statement. "We want to thank WOW Air's management for a good cooperation in the project during recent weeks. All our best wishes go out to the owners and staff of the Wow Air. "
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