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WOW headed for bankruptcy [operations ceased 28 March 2019]

WOW headed for bankruptcy [operations ceased 28 March 2019]

Old Aug 22, 18, 4:46 pm
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WOW headed for bankruptcy [operations ceased 28 March 2019]


It is being widely reported in the Icelandic media that WOW air is facing great financial difficulties. They just announced a massive sale on all their airfares. Caveat emptor.
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Old Aug 24, 18, 11:39 am
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interestingly Norwegian is also struggling financially, and many people are saying that they are not in a sustainable financial position and speculating their demise... (I certainly hope not though)
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Old Aug 31, 18, 10:50 pm
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Financial problems for FI as well. CEO resigned a few days ago due to bad earnings forecast.

Icelandair lowers full-year guidance again; CEO resigns Airline Financials content from ATWOnline
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Old Sep 2, 18, 5:18 pm
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This was in the Grapevine a few days ago, concerning FI's problems.
:https://grapevine.is/news/2018/08/30...s-stock-price/

In part it says this of their plans for recovery:

"Those plans include price increases early next year. They also include efforts to streamline operation and shift to a business model similar to WOW Air,
in which amenities are not included but ticket prices appear cheaper in online comparisons"

I'd hate to see FI go the way of the carriers that charge for everything. But that has been going on for decades, as shown in this
1987 commercial by Alaska Air.
.
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Old Sep 4, 18, 11:08 am
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Based on their "service", I can only hope they do fail.
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Old Sep 10, 18, 6:21 am
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I think that Icelandair's financial situation cannot be compared to WoW's. Icelandair is a well financed airline, high equity - low debt, and owned largely by the country's pension funds. WoW is privately owned by one individual and all debt financed.
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Old Sep 10, 18, 6:30 am
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While businesses which pay for their employees' tickets all want lower prices, the ULCC's don't attract much of that vast segment because of a lack of interline ticketing, baggage, and IRROPS services. Put simply, all it takes is having an employee stuck somewhere he should not be and having to purchase a full fare ticket for him to get home because the ticketed ULCC lacks backup aircraft and crews.

It is not about whether the stale sandwich is included in the ticket or not, but whether the cheaper ticket winds up being more expensive in the end.

The model will only work when consumers accept that you get what you pay for. FI has done that quite well.
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Old Sep 11, 18, 1:05 am
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Some WOW air news expected today. The results of a bond issue to raise funds should become clear soon. If it fails to inject some serious cash into the operation, then they could have a serious problem. Icelandic authorities are rumored to be working overtime on contingency plans although everyone is acting like there is no problem. It all brings back memories from the prelude to the banking crisis ten years ago. Everything was fine until it wasn't anymore.
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Old Sep 12, 18, 4:21 am
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Originally Posted by TFKEF View Post
Some WOW air news expected today. The results of a bond issue to raise funds should become clear soon. If it fails to inject some serious cash into the operation, then they could have a serious problem. Icelandic authorities are rumored to be working overtime on contingency plans although everyone is acting like there is no problem. It all brings back memories from the prelude to the banking crisis ten years ago. Everything was fine until it wasn't anymore.
The bond issue was 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.
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Old Sep 12, 18, 4:22 am
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Originally Posted by TFKEF View Post
Some WOW air news expected today. The results of a bond issue to raise funds should become clear soon. If it fails to inject some serious cash into the operation, then they could have a serious problem. Icelandic authorities are rumored to be working overtime on contingency plans although everyone is acting like there is no problem. It all brings back memories from the prelude to the banking crisis ten years ago. Everything was fine until it wasn't anymore.
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.
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Old Sep 12, 18, 7:46 am
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WOW Air CEO Skúli Mogensen spent yesterday in meetings with Icelandic banks, pension funds and most interstingly the competition authorities. I'm guessing the bond issue isn't going as well as they hoped and they are vying for domestic investors as a last resort. A meeting with the competition authorities has to mean that a merger or a takeover of some sort might be on the table.
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Old Sep 14, 18, 9:56 am
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Latest news of the bond issue is that WOW has reached the minimum amount that they were aiming for. If so, they are sticking around for a while longer. They desperately need to start showing some profits soon though if they don't want to go through all this again in a year.
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Old Sep 14, 18, 9:57 am
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WoW air just announced that they had completed "successfully" their 50 million Euros international bond offering. It carries Euri.bor (prime) interest plus 9 - nine - percent interest !!! Having to borrow at prime + 9% interest is not exactly to inspire confidence. It seems rather to be the definition of a junk bond.
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Old Sep 14, 18, 10:21 am
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Their operating cashflow is about negative $30m a year so the bond should keep them going for roughly another year and a half, assuming no debt maturities, longer if their financials improve
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Old Sep 16, 18, 5:11 pm
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It was reported over the weekend that WoW had stopped paying landing charges at KEF this spring and owes the (government owned) airport operator a small fortune in arrears...
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