Struggling Icelandic carrier WOW Air has received a lifeline from bondholders, avoiding a default, and keeping the company in the air for the time being.

WOW’s bondholders have agreed to convert their debt into an ownership position, giving the ultra low-cost carrier some much-needed financial breathing room. They will reportedly take a 49% stake in the company.

WOW is not out of the woods, as it also turns to investors who own 51% of the company for a cash infusion.

“This is an important milestone in financially restructuring the company and secure the long-term sustainability of WOW air,” the company said in a statement.

WOW’s situation turned desperate late last week after talks broke down, first with American investment firm Indigo Partners, then rival airline Icelandair broke down.

WOW serves Toronto and Montreal from its hub in Reykjavik, including flights scheduled to depart Tuesday.