Wow Air, struggling to avoid bankruptcy, is now in "advance discussions" about a financial restructuring arrangement with bondholders and other creditors.

The aim of the talks is to reach a deal in which creditors would agree to convert the funds owed to them into equity in the airline. 

Two potential investors walked away from Wow last week. On Thursday, Wow said private equity firm Indigo Partners ended talks that had been ongoing since November. Indigo is a lead investor in several budget airlines, including Frontier, Hungary's Wizz Air, Mexico's Volaris and Chile's JetSmart. In December, Wow said Indigo was contemplating investing up to $75 million. 

After Indigo talks ended, Wow briefly returned to the table with competitor Icealandair, but talks broke down Sunday. Icelandair had previously nixed a proposed merger with Wow last November. 

Wow posted a pre-tax loss of $42 million during the first nine months of 2018. The carrier's deteriorating finances have already caused it to reduce its fleet from 24 to 11 aircraft in recent months and to eliminate all widebody flying. Wow has also shrunk its network, including U.S. flying. The carrier currently serves just Boston, Newark, Baltimore and Detroit in the U.S. market, down from 13 destinations last summer. 

Wow said that it would provide an update on restructuring efforts sometime Monday. 

Wow's website shows that it had cancelled 22 flights for Monday as of midday eastern time, including scheduled charter operations.

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