WOW headed for bankruptcy [operations ceased 28 March 2019]
Aug 22, 2018, 4:46 pm
#1
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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.
Aug 31, 2018, 10:50 pm
#3
Join Date: Sep 2004
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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
Icelandair lowers full-year guidance again; CEO resigns Airline Financials content from ATWOnline
Sep 2, 2018, 5:18 pm
#4
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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.
.
: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.
.
Sep 10, 2018, 6:21 am
#6
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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.
Sep 10, 2018, 6:30 am
#7
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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.
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.
Sep 11, 2018, 1:05 am
#8
Join Date: Oct 2016
Posts: 41
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.
Sep 12, 2018, 4:21 am
#9
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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.
Sep 12, 2018, 4:22 am
#10
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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.
Sep 12, 2018, 7:46 am
#11
Join Date: Oct 2016
Posts: 41
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.
Sep 14, 2018, 9:56 am
#12
Join Date: Oct 2016
Posts: 41
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.
Sep 14, 2018, 9:57 am
#13
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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.
Sep 14, 2018, 10:21 am
#14
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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
Sep 16, 2018, 5:11 pm
#15
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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...