Wow Air grounds all flights as cash lifeline sought

Crisis-hit Icelandic airline Wow Air says it has "postponed" all flights as it awaits news on a possible cash lifeline.

It grounded aircraft on Thursday following months of talks with prospective financial backers - saying it was in the final stages of negotiations with a group of investors and further information would be provided later in the morning.

The statement said: "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 28th are entitled to cancel their reservation for a full refund or change their reservation to the next available Wow Air flight."

It concluded: "Wow Air apologises for the disruption to travel plans".

The budget carrier uses its Reykjavik base as a hub airport to connect Europe and North America - with UK services operating from Gatwick, Stansted, Bristol and Edinburgh.

The suspension of flights leaves the travel plans of thousands of passengers up in the air and it is not clear how long the disruption will continue.

However its announcement suggested that progress was being made in efforts to substantially reduce its debt.

Wow had said on Tuesday that bondholders had approved a plan to convert their bonds into equity - allowing talks with investors to begin.

The company was founded by Icelandic telecoms entrepreneur Skuli Mogensen in 2012 and it is currently wholly owned by his Titan investment vehicle.

Tough competition and higher fuel bills have been among pressures facing European airlines.

Monarch Airlines, Primera Air, Flybmi and Air Berlin have been among the most recent failures while struggling Flybe was bought up by a consortium including Virgin just last month.