Wow air is to reduce its fleet from 20 to 11 single-aisle Airbus jets and is now in negotiations with its lessors to return some of its aircraft, including its only remaining Airbus A330.
Four Airbus A321s are being sold in a transaction that will improve its liquidity by more than $10m.
The airline is in talks with private equity firm Indigo Partners, owner of Frontier Airlines, about an investment deal but said the restructuring was necessary following a “challenging year”.
WOW said there would be no changes in the schedule in December and early January. However, a new schedule will be implemented later in the month.
News of the restructuring comes just days after Wow made its debut in India with three weekly flights from Reykjavik to New Delhi using its A330.
The carrier said passengers affected by its network changes would be contacted in due course. In addition, the airline has made 111 employees redundant but it said it hopes to offer affected staff employment in the future.
“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,” said WOW founder and chief executive Skuli Mogensen.
“However, in order to ensure our future and preserve Wow air in the long run, we unfortunately must take these drastic measures.”
On 30 November, Wow and Indigo Partners said a takeover deal had been agreed in principle and the two parties hoped to close the transaction “as soon as practicable”.
Details of the proposed investment were announced just hours after Icelandair confirmed that its planned takeover of Wow had been abandoned as the two parties were unable to meet the conditions for the purchase.
Indigo Partners is led by managing partner Bill Franke, an aviation industry veteran. The firm currently owns Frontier Airlines and has stakes in JetSMART in Chile, Mexico’s Volaris and Wizz Air of Hungary. It previously was a lead investor in Tiger Airways based in Singapore and US carrier Spirit Airlines.