Wow Air has announced plans to restructure and “return to its roots”, as discussions continue with potential investor Indigo Partners.

In a statement the Icelandic carrier said that “After a challenging year, Wow Air is now restructuring and simplifying its operations to return to its roots as a profitable ultra-low cost airline while discussions with Indigo Partners progress”.

Plans will see the carrier’s fleet reduce from 20 to 11 aircraft, with Wow’s A330 aircraft being returned to lessors, and four A321s being sold “in a transaction that will improve Wow Air’s liquidity by more than 10 million USD”.

Wow said that a new flight schedule will be implemented in January, and Business Traveller understand that the carrier’s recently introduced Delhi service will be scrapped, along with flights to Los Angeles.

A total of 111 permanent staff have been laid off, while contractors and short term staff “will not be renewed for the time being”.

Announcing the move CEO and founder Skuli Mogensen said:

“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.”

The troubled carrier has been forced to drop a number of routes in the last few months, leading to speculation that it had over expanded.

In early November Icelandair announced plans to acquire Wow, but less than a month later these were abandoned.