Indigo Partners has walked away from a potential investment in Wow Air.

The decision sees Wow Air turn its attention once again to a potential tie-up with Icelandair.

Discussions between the two Iceland-based carriers are currently ongoing, with a decision expected on Monday.

“The discussions will be based on the doctrine of competition law regarding the failing firm defence,” read a statement from Icelandair.

“The discussions will take place in cooperation with the Icelandic authorities.”

Icelandair had announced plans to take over Wow Air in November.

However, the initiative was later abandoned after several pre-conditions were not met in time before a shareholders meeting on the proposed takeover.

Indigo Partners subsequently stepped in and had proposed an investment of up to $90 million.

No reason was given for the current breakdown of that deal.