PHOENIX — After Icelandair’s buyout deal fell through earlier this week, another company has swooped in to save the struggling WOW Air.

Indigo Partners LLC, a Phoenix-based private equity firm that owns Frontier Airlines, has announced an in-principle agreement has been reached with WOW to invest in the Reykjavik-based ULCC. Terms of the transaction were not disclosed.

Following successful completion of due diligence, both parties would work to close as soon as practicable. WOW’s CEO and primary shareholder, Skuli Mogensen, would remain a principal investor in WOW upon completion of the transaction.

“The demand for low-cost air service continues to expand rapidly worldwide, and with Indigo as a partner, we hope to take full advantage of this highly attractive market segment,” said Mogensen. “I am excited to work with Indigo and I am convinced it is the best long-term move for our people and passengers.”

Bill Franke, Managing Partner of Indigo Partners, added: “Skuli and WOW’s management and employees have done a remarkable job in creating a well-regarded, successful ULCC brand. We have a strategic vision for the airline, and look forward to working with its employees and agents to deliver that vision.”

Earlier this week, it was reported that Icelandair backtracked on its plans to purchase rival WOW, a conclusion that interim President and CEO Bogi Nils Bogason called “disappointing”. Icelandiar announced its intention to purchase the ULCC in early November.