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WOW headed for bankruptcy [operations ceased 28 March 2019]

WOW headed for bankruptcy [operations ceased 28 March 2019]

Old Sep 19, 2018, 11:49 pm
  #16  
 
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Hey guys, thanks for the updates. Very useful info. I’ve linked to this thread from a TripAdvisor forum thread, ironically about Norwegian but it’s discussing unsustainable discounted TATL airfares.

Just one request, which is to provide links to the sources of information for these updates. I did find news articles to back up all/most of the updates, though it wasn’t easy. Googling “WOW Air financials” brought next to nothing (“WOW Air bond issue” worked). Always good to link to sources. :-)

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Old Sep 20, 2018, 12:03 am
  #17  
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Originally Posted by Braniff
The bond issue appears to have been a failure. The airline will no doubt be bailed out by the government directly or indirectly through one of the government-owned banks. "Too Big to Fail," by Icelandic standards.
If I’m FI, why wouldn’t I be just a little annoyed that my government is bailing out a competitor?
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Old Feb 20, 2019, 8:58 pm
  #18  
 
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How much longer can they run?

I have friends who booked a vacation on wow next week. I'm wondering whether they should be worried.

In past airline failures it always seems to happen very suddenly and is usually precipitated by a single airport or supplier not getting paid. The news that they are apparently in arrears on airport fees is making me really worried for my friends.
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Old Feb 21, 2019, 3:47 am
  #19  
 
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One week is too short to be worried. Yes, they might suddenly stop all flights at any time during the week. Still, it's easier to run predictions when talking about months or years of service. For a week, it might happen, who knows.

Wow air, like other LH LCC, would like to survive through summer and get as much money as possible from that juicy time of the year.
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Old Feb 21, 2019, 11:54 am
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Looking over past examples nearly all (Zoom, Primera, Monarch, Cobalt, even Air Berlin) came in October or at the earliest August 31st. Let's hope Wow doesn't break this mold ...
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Old Feb 22, 2019, 9:33 am
  #21  
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Last I heard, Indigo Partners (holding controlling interest in Frontier and JetSmart, also invested in WizzAir and Volaris) agreed to acquire 49% of Wow Air.
'With that investment, I wouldn't expect Wow to disappear in the short term. Wow has already changed their business strategy and route network after the agreement with Indigo.
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Old Feb 22, 2019, 12:05 pm
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I thought that Indigo had already made the investment, but I can't find anything confirming that money's been transferred.
I don't have a subscription to this website, but the headline doesn't look good for WoW: https://www.ch-aviation.com/portal/n...rt-fees-report
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Old Feb 22, 2019, 2:41 pm
  #23  
 
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Originally Posted by iflyjetz
I thought that Indigo had already made the investment, but I can't find anything confirming that money's been transferred.
I don't have a subscription to this website, but the headline doesn't look good for WoW: https://www.ch-aviation.com/portal/n...rt-fees-report
These articles are accessible without a subscription, but the text is in Icelandic:
https://www.mbl.is/vidskipti/frettir...reidslufresti/
https://www.mbl.is/vidskipti/frettir...njulegum_fasa/
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Old Feb 27, 2019, 6:46 pm
  #24  
 
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What is written above is incorrect.
Indigo Partners has NOT invested in WOW. They have agreed to invest, IF unspecified terms are met and all due diligence proceedings do not dig up any new issues.
They are basically WOWs best and only hope, since FI already decided, after their DD, that WOW is a goner.

Irregardless, we'll know by tomorrow. The deadline for Indigo Partners investment is by 28th of February. I can't imagine this deadline being extended, since it would put WOW into even weaker position.
If Indigo Partner decides not to invest, I'll imagine WOW will fold, unless saved by the government.
I would imagine FI would lobby for not saving WOW, but rather do a bulk takeover of their operations if it comes to that.

The thing is that since ISK is such a small currency, any significant investment by IP should be preceded by commensurate ripples in the FX market. This certainly was the case previously. They can't simply dump tens of millions of dollars into the market without some visible effect. There have been no ripples of any kind during the last week or two. Then again, maybe someone has dialed up Seđlabanki Íslands and asked them to assist with it...

Edit: same thing ("we'll know tomorrow") said here: https://turisti.is/2019/02/urslitast...-air-a-morgun/
Edit2: the deadline was set by WOW bond holders. WOW has effectively already defaulted on their bonds and this was their chance to "right the ship".

-
DJ

Last edited by docjones; Feb 27, 2019 at 6:59 pm
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Old Feb 28, 2019, 6:00 am
  #25  
 
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Originally Posted by docjones
The thing is that since ISK is such a small currency, any significant investment by IP should be preceded by commensurate ripples in the FX market. This certainly was the case previously. They can't simply dump tens of millions of dollars into the market without some visible effect. There have been no ripples of any kind during the last week or two. Then again, maybe someone has dialed up Seđlabanki Íslands and asked them to assist with it...
Would they have to pay ISK to the company? I thought that a company could accept a cash injection in any currency. I suspect that a large part of the costs (fuel, payments to airports and ATC outside Iceland) isn't in ISK to begin with.
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Old Feb 28, 2019, 8:16 pm
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https://www.mbl.is/vidskipti/frettir..._haldid_afram/

No agreement has been reached. WOW and Indigo Partners have agreed to continue discussions until March 29th. This is basically admission that WOW is bankrupt without IP saving them.
Can't imagine what leverage WOW might have at this point to negotiate any further.
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DJ

Last edited by docjones; Feb 28, 2019 at 8:34 pm
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Old Mar 1, 2019, 10:49 am
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Originally Posted by Some person
Would they have to pay ISK to the company? I thought that a company could accept a cash injection in any currency. I suspect that a large part of the costs (fuel, payments to airports and ATC outside Iceland) isn't in ISK to begin with.
I fully agree. I seriously doubt their aircraft leases are in ISK. The largest item that they have in ISK is likely payroll.

I don't think this will work for Indigo Partners; I expect them to walk away. A collapse of WoW would keep Norwegian Air alive a little while longer unless some other greater fool steps in and fills the void with ULCC pricing.
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Old Mar 2, 2019, 8:21 am
  #28  
 
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Here's an article stating that the deadline's been extended: https://now.guidetoiceland.is/2019/0...up-in-the-air/
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Old Mar 11, 2019, 11:36 am
  #29  
 
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This is the latest from WOW; looks like a 25 March deadline for bondholders to accept new terms.
Not clear what happens if they don't, but it will not be good.

https://wowair.is/investors/media/
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Old Mar 21, 2019, 3:34 pm
  #30  
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It was just reported this evening in the Icelandic media that talks are now on (again) for Icelandair to take-over WOW. The talks include the government and are to finish by Monday.
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