WOW headed for bankruptcy [operations ceased 28 March 2019]

Reply Subscribe

Thread Tools

Search this Thread

Mar 21, 2019, 3:39 pm

#31

docjones

Join Date: Sep 2010

Location: ATL/KEF/HEL

Programs: AY Silver, BA Silver, FI Saga hopeful

Posts: 63

Yes, things are coming to a head. Indigo Partners is now out of the picture and they will not save WOW. Now it is up to Icelandic government to play midwife between Icelandair and WOW, and manage an orderly merger.
https://wowair.is/investors/media/

It also seems that Icelandic aviation authority running KEF has managed to rack up +18M USD increase in liabilities from its customers during this year. I'm willing to bet majority of that is WOW, but probably also Icelandair since their CEO was complaining about it earlier this month along the lines of "Why is Isavia funding competitors".

It's also interesting that Isavia has mandated WOW to have one frame at KEF at all times, to guarantee payment of their debts. However WOW does not own any of their planes. So effectively WOW has forced their leasing company to explicitly guarantee their debts, since Isavia has had no troubles "confiscating" planes previously. Situation that is surely untenable for their lessors.

Also TF-NEO, which had been the "guarantee plane" during the last few days, left for "service" to Europe earlier today, which apparently caused a little bit of a storm in a teacup...
It appears the plot is thickening.

-
DJ

Braniff likes this.

Last edited by docjones; Mar 21, 2019 at 4:06 pm

Mar 21, 2019, 3:41 pm

#32

bman1002

Join Date: Oct 2018

Location: Bay Area, CA

Posts: 223

Quote:

Originally Posted by docjones

Yes, things are coming to a head. Indigo Partners is now out of the picture and they will not save WOW. Now it is up to Icelandic government to play midwife and manage an orderly merger.
https://turisti.is/2019/03/icelandai...fja-vidraedur/

-
DJ

What's left in terms of assets? Handful of A320s?

Mar 21, 2019, 3:52 pm

#33

docjones

Join Date: Sep 2010

Location: ATL/KEF/HEL

Programs: AY Silver, BA Silver, FI Saga hopeful

Posts: 63

Quote:

Originally Posted by bman1002

What's left in terms of assets? Handful of A320s?

Nothing. WOW already sold all the planes they owned to Air Canada.
-
DJ

Mar 21, 2019, 5:35 pm

#34

iflyjetz

Join Date: Jul 2001

Programs: Marriott LT Tit; Hyatt Explorist; Hilton CC Gold; IHG CC Plt; Hertz (MR) 5 star

Posts: 5,536

WoW can't die fast enough. It's a scourge to the industry. I hope that Skuli Mogensen is left penniless.

Mar 22, 2019, 2:50 am

#35

Braniff

Original Poster

Join Date: Jan 2005

Location: Europe

Programs: UA:1K MM, AF:FB-Platinum; QR: PC Platinum, FI: Saga Gold

Posts: 2,931

Quote:

Originally Posted by iflyjetz

WoW can't die fast enough. It's a scourge to the industry. I hope that Skuli Mogensen is left penniless.

They’re certainly good for keeping fares down. The bloated Icelandair will no doubt enjoy less competition and they can now go back to their monopolistic roots on flights to and from Iceland.

tecate55 likes this.

Mar 22, 2019, 6:40 am

#36

GUWonder

Suspended

Join Date: Jul 2001

Location: Watchlisted by the prejudiced, en route to purgatory

Programs: Just Say No to Fleecing and Blacklisting

Posts: 102,095

Quote:

Originally Posted by iflyjetz

WoW can't die fast enough. It's a scourge to the industry. I hope that Skuli Mogensen is left penniless.

It can’t live long enough. It’s a scourge to oligopolistic industry cartel kingpins and a boon to the industry’s consumers in the markets of relevance.

Mogensen won’t end up penniless, even with WOW’s demise.

BearX220, Braniff, tecate55 and 1 others like this.

Mar 22, 2019, 10:51 am

#37

iflyjetz

Join Date: Jul 2001

Programs: Marriott LT Tit; Hyatt Explorist; Hilton CC Gold; IHG CC Plt; Hertz (MR) 5 star

Posts: 5,536

Quote:

Originally Posted by Braniff

They’re certainly good for keeping fares down. The bloated Icelandair will no doubt enjoy less competition and they can now go back to their monopolistic roots on flights to and from Iceland.

Icelandair posted a $56M USD net loss for 2018. Their highest net profit in the last 5 years was $111M USD; about enough to buy a new 737 Max 8. The airline industry is defined by razor thin margins.

Quote:

Originally Posted by GUWonder

Yes, because the airline industry is such a high margin business where they 'gouge' their customers with fares that are inflation-adjusted lower than any time in history.

Mar 22, 2019, 2:42 pm

#38

4sallypat

Join Date: Feb 2018

Location: Sunny So Cal

Programs: SPG, HH, IHG, BA, DL

Posts: 192

Quote:

Originally Posted by Braniff

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.

I was wondering if the Frontier airlines would bail them out - nope - talks were shut down:
Bankruptcy soon @ WOW ???

Mar 23, 2019, 12:38 pm

#39

Dpetryszyn

Join Date: Feb 2017

Posts: 258

Should be an interesting week for me. Flying tomorrow ewr to kef. Fly back next Saturday night...hope they can survive one more week!

Mar 23, 2019, 4:31 pm

#40

GUWonder

Suspended

Join Date: Jul 2001

Location: Watchlisted by the prejudiced, en route to purgatory

Programs: Just Say No to Fleecing and Blacklisting

Posts: 102,095

Quote:

Originally Posted by iflyjetz

Icelandair posted a $56M USD net loss for 2018. Their highest net profit in the last 5 years was $111M USD; about enough to buy a new 737 Max 8. The airline industry is defined by razor thin margins.

Yes, because the airline industry is such a high margin business where they 'gouge' their customers with fares that are inflation-adjusted lower than any time in history.

The TATL flying industry cartel kingpins have some serious money-making machines in play amongst them in recent year, to the tune of some of them being profitable by billions of USD per year in some rather recent years — amounts that, inflation-adjusted, are way higher than they used to be, and are a product of consumers paying more than was the case before the cartel kingpins got so many governmental waivers and favors from the USG. Of course in any large industry with multiple players, not all players are exactly equal.

Mar 24, 2019, 12:28 pm

#41

Braniff

Original Poster

Join Date: Jan 2005

Location: Europe

Programs: UA:1K MM, AF:FB-Platinum; QR: PC Platinum, FI: Saga Gold

Posts: 2,931

Icelandair Ends Talks with WOW

Icelandair has just walked away from talks on a possible take-over of WOW. Government had announced previously they would not rescue WOW. Things look dour.