is WAB about to emerge from the ashes of WOW air or is the WOW factor about to be reborn?

There has been much aviation media speculation over the last few days regarding a group of investors, including two former directors of the bankrupted WOW air are about to start a new airline called WAB - We Are Back.!

Local Icelandic media frettabladid.is the two former directors are working in conjunction with Irish investment fund Avianta Capital, which is owned by Aislin Whittley-Ryan, daughter of one of the Ryanair founders, to create the new low-cost long-haul airline. Apparently, Avianta Capital will be funding the new venture to the tune of $40 million over three years to get the airline flying.

The group are also looking into getting finance from at least two banks, one Swiss and one Icelandic, plus other investors - including Arnars Más Magnússon and Sveinn Inga Steinþórsson both previously with WOW air. If the plans come to fruition, then it is expected the airline will start operations in the autumn of 2020, it will operate 14 routes to Europe and North America with a fleet of six or so aircraft.  

WOW air halts all flights as airline collapses.

It's been on the cards for some time, investment talks with Icelandair, Indigo partners and others all failed, its debts rocketed,  aircraft leasing firms impounded aircraft due to nonpayment and then finally today, the Icelandic budget airline WOW air went out with a whimper.

In the typical arrogant fashion of the egocentric CEO and founder, Skúli Mogensen,  there was no heartfelt apology, no sentiments of regret, no words of commiseration to either staff or thousands of stranded passengers, just the blunt message 'End of Operation of WOW AIR' on the firm's website.

The airline had huge debts and was simply unable to pay its bills and now the company has ceased operations and all WOW air flights have been cancelled.  The collapse of the firm will hit many passengers hard as many will find it virtually impossible to get their money back.

Some, however, who paid with a credit card, under Section 75 of the Consumer Credit Act 1974 should be able to claim a refund, they should approach the card company straight away. People who booked WOW air flights as part of a package are protected by the Package Travel Directive if it was with a European travel firm, agency or tour operator. Passengers booking with an ATOL bonded tour company in the UK will also be covered and should contact that tour operator.  Passengers also may be covered if they took out special Scheduled Airline Failure Insurance, check with the insurance company, other travel insurances may not or may not include SAFI and people should check their policy wording carefully.

Icelandair to the rescue...

WOW air restructuring again in last ditch attempt to stay operating

In an unsurprising move, some of the WOW air bondholders have approved to convert their bonds to equity in the firm in a restructuring bid to save it from insolvency. 

The bondholders have formally approved to convert their bonds into equity and formal discussions with investors have commenced to fund the company, WOW air said, which is an important milestone in financially restructuring the company.

The deal is essential to secure the long-term sustainability of WOW air, which has recently held talks with Icelandair and Indigo Partners - both of which have pulled out. Icelandair has held talks a number of times with WOW management regarding investments and mergers, previous the company said WOW's debts were greater than previously understood which is why they ended talks.  

Where WOW air goes in the future is uncertain, over the last few days it has had to cancel a number of routes as one of its aircraft appears to have been impounded due to lack of payment to the leasing firm.

Time is running out for WOW as plane is impounded

The end of WOW air, the Icelandic budget airline could very well be about to happen as the airline cancels a number of flights over the next couple of days. Flights to Chicago, Milan, Pitsburg, Barcelona, Brussels and Cuba have all been cancelled and we're told this is due because of at least one aircraft, an Airbus A321 TF-PRO has been impounded in Montreal for non-payment of aircraft leases.  It's also understood that sister aircraft TF-NOW has also been impounded and is owned by the same leasing company 'Jin Shan Ireland Co Ltd'.

Can the airline secure more funding from its bond holders to pay those bills and get the aircraft flying again?   It's not looking promising. 

The future of the Icelandic airline WOW air is in doubt after Icelandair pulls out of rescue talks

Image WOW Air

The Icelandair Group has decided that its possible involvement in WOW air’s operations, which it announced on 20th March 2019, will not materialize. 

Therefore, the airline group says, 'all discussions between the parties have ended.'

The future of WOW air as a going concern is incredibly limited, Indigo Partners, the investment force behind Wizz Air in Europe and Frontier in the USA also recently pulled out of in-depth rescue investment plans.  

Some Icelandic commentators are expecting WOW to call a halt to flying operations over the next 24 hours.   WOW air has put out the following statement:

"A majority of WOW air Bond Holders and other creditors of WOW air are in advance discussions with the aim of reaching an agreement on a voluntary restructuring including an agreement of converting current debt into equity and fund the company towards long term sustainability. Further information will be given tomorrow."

However, as all previous discussions and plans have failed to achieve an acceptable result, the future of these last ditched talks to avoid the collapse of the carrier do not look very promising. 

The WOW saga continues........................Indigo are out and Icelandair are back in..........talks continue

The Icelandic WOW air saga continues to twist and turn, just when you thought it was all sorted, another hurdle appears and clunk and clatter the plans derail and its all change!

The proposed investment of Indigo Partners in WOW air has been cancelled by the investment firm behind Frontier Airlines, Wizz Air and Volaris.  The halting of investment, therefore, means all negotiations have ended.  

Now WOW has again entered into discussions with the fellow Icelandic air provider, Icelandair, who held talks with the purple plane firm before Indigo popped up.  At the time Icelandair said debts were too big at WOW for them to invest, although it is fair to say Icelandair's own finances at the time were not at all super secure.

The future of WOW and Icelandair together is not clear, however, we may not have to wait for all that long,  according to WOW, both parties aim to conclude the negotiations by Monday, March 25th, 2019.

Indigo to rescue WOW for $75 million

Indigo Partners,  the power behind airlines such as Wizz air and Volaris is coming to the rescue of WOW air after months of uncertainty for the Icelandic budget carrier.

Many routes had been axed, some aircraft sold, staff sacked as the debts mounted for the small carrier, however  Indigo, after tough negotiations will be investing around $75million into WOW. Indigo Partners intends to, and their interests are also aligned to, adequately capitalize WOW through the turn-around as they have done before with other successful aviation businesses. 

The investment will primarily be in the form of a loan with a 10-year maturity and the initial shareholding of Indigo Partners will be 49%. Subject to foreign ownership regulations, Indigo Partners could obtain additional equity should the conversion option be exercised during the period of the loan, WOW's boss Skuli Mogensen explained in a letter to the airlines' other investors. WOW will make payments for and up to $1.5m each year to Indigo for potential advisory services. 

A good time to cross the pond......

Now is a really good time to book a transatlantic flight with one of the low-cost carriers as fares are really really low.

WOW air, the Icelandic carrier has been having a torrid time recently, first it was being bought by fellow Icelandic air transport carrier, Icelandair,  which fell through, now the discussions with Indigo Partners are dragging on at an almost glacial pace. However, this could be good news for passengers as fares are falling, for example for travel between now and March WOW's fares to Boston, New York and Washington from London are just £149 including taxes on a oneway basic fare, via Iceland.

Norwegian also have some special fares for travel from now until the end of March all over its network, but looking at those flights crossing the Atlantic there are some big savings.  New York JFK from £144.90, Boston from £134.90, Orlando from £149.90, Fort Lauderdale from £144.90, Denver from £164.90, Las Vegas from £164.90, Los Angeles from £169.90, Oakland from £159.90, Seattle from £169.90, Chicago from £134.90 and Austin from £164.90.  All are from London Gatwick and based on one-way basic type seat only fares.  The airline also has some even cheaper flights from Ireland to a few destinations in the USA, starting from around €99 one way. 

WOW air cuts even more aircraft from its fleet

The discounted low-cost airline from Iceland, WOW air has been forced by financial constraints to cut its fleet even further.  Following returning four aircraft to their lessors last month, WOW has confirmed it will be selling four aircraft to Air Canada.

As part of an ongoing restructuring process, the airline is selling four new Airbus A321 aircraft, that is has taken on financial leases due to arrive next month. The aircraft have been sold to the national carrier of Canada, Air Canada and is expected to increase WOW air's liquidity by more than $12 million.”

In another effort to cut costs, the carrier is also moving its popular Keflavik to London service from Gatwick to Stansted. The move will take place at the end of March next year  “We saw really high demand over the summer from passengers choosing WOW’s flights to Reykjavik and beyond to destinations across the US, and inbound tourism to London and the east of England,” claimed Mats Sigurdson for the airline. The move follows the curtailment of a number of US destinations from the route network and the axing of over 100 staff.

Aviation investment company Indigo Partners is said to be still investigation and negotiation over a complete take over package of WOW air.   

WOW air offer 50% off Christmas discount -

 50 % off all destinations

While discussions with Indigo Partners are ongoing, it seems business as usual for the Icelandic budget carrier, WOW Air, which has just issued an extra special discount just in time for the festive period.

All potential future passengers need to do, is use a discount code of WOWXMAS which will then give them a seasonal discount of 50%  Yes, that's 50% off normal fares, to all destinations on roundtrip tickets, effective December 12th to 16th, 2018 and is for travel between December 12th, 2018 to March 31st, 2019. 

With 20 total destinations spanning Europe, the UK, and North America, travellers have the opportunity to visit a myriad of exciting cities and sights in 2019 at a deeply discounted rate. "We are thankful for our WOW passengers and are happy to offer the gift of travel this holiday season for a low price," said Skúli Mogensen, founder and CEO of WOW air. "At WOW air, we are committed to making travel more affordable and accessible to all, knowing that the memories made are gifts that keep giving throughout the year."

Talks progressing between WOW and Indigo

Indigo Partners, the private equity firm behind Wizz Air, Tiger Airways, Spirit and Frontier confirmed it has been having due diligence meetings this week in Reykjavik as the initial steps to a potential Indigo investment in the financially struggling Icelandic carrier WOW air.  

A team from Indigo Partners spent the last two days with WOW air management to review the business and opportunities of the airline going forward. The overall process is progressing and both parties are working to finalise the investment.  Issues remaining include WOW's planned network development, vendor contracts including aircraft leases and certain waivers from WOW's bondholders. 

"These have been two very good days with detailed discussions around WOW's current business and how we would envision it going forward.  WOW air has a dedicated team and a strong brand that has significant potential," said Bill Franke, Managing Partner of Indigo Partners.

"We are very pleased with the visit from Indigo Partners and it's clear that we can learn a lot from Bill Franke and his team on how to build a successful low-cost airline.  I don't think we can find a better and more experienced partner to bring WOW air to the next level," said Skuli Mogensen, CEO and founder of WOW air.

WOW is advised in this transaction by Plane View Partners LLC, the U.S. air transportation advisory firm.

Fellow Iceland based airline Icelandair had previously been interested in taking over WOW in a share swap deal, however, they pulled out citing deeper debts at WOW as well as not being able to secure enough funding for the operation of the two airlines. 

(Image WOW air)

Indigo Partners reach agreement on WOW air after Icelandair backs out

Photo WOW

Indigo Partners, the investment group that is lead investors in Tiger Airways, Spirit Airlines, Wizz Air, Frontier Airlines, Volaris Airlines and JetSMART has agreed in principle to invest in the Icelandic carrier WOW air after Icelandair pulled the plug on its deal.

The terms of the transaction have not been disclosed and following successful completion of due diligence, the parties would work to close as soon as practicable. According to the limited details released, WOW's current CEO and owner, Skuli Mogensen, would remain a principal investor in WOW upon completion of the transaction.

WOW air is an ultra-low-cost carrier currently serving 25 destinations across Europe and North America. "The demand for low-cost air service continues to expand rapidly worldwide, and with Indigo as a partner, we hope to take full advantage of this highly attractive market segment," said Mr. Mogensen. "I am excited to work with Indigo and I am convinced it is the best long-term move for our people and passengers."

"Skuli and WOW's management and employees have done a remarkable job in creating a well-regarded, successful ULCC brand," said Bill Franke, Managing Partner of Indigo Partners. "We have a strategic vision for the airline, and look forward to working with its employees and agents to deliver that vision."

WOW big news for the Icelandic aviation industry as Icelandair agrees to buy WOW air.

The Icelandair Group has announced today, Monday, November 5th, it is going to buy out its low-cost Icelandic competitor WOW air, in a deal that values WOW at about $18 million.

The deal won't involve vast cash transfers or big loans for Icelandair, that already has debts in excess of $400 million, to afford to buy out its rival, its all about a share deal swap, Icelandair will take all the shares of WOW and WOW’s founder and sole owner Skuli Mogensen, will receive just over 272 million shares in Icelandair - that will be around 5.4% of the company.

Both Icelandair and WOW air will continue to operate under separate brands, at least for the time being and the arrangement has to receive have both Icelandair shareholders and regulatory approval. before it can be completed. If those approvals are granted, as many in the industry believe it will, the combined market share of both airlines on the transatlantic market will be around 3.8% and could see the reintroduction of a number of services that both airlines have axed in recent weeks. 

"WOW air has in recent years built a strong brand and enjoyed great success in the company‘s markets to and from Iceland and across the Atlantic." Said Bogi Nils Bogason, Interim President & CEO of the Icelandair Group, adding "There are many opportunities for synergies with the two companies but they will continue to operate under their own brands and operating approvals. The tourism industry is one of the cornerstones of the Icelandic economy and it is important that flights to and from Iceland will remain frequent.“

Clouds of uncertainty hanging over the Icelandic aviation industry.

Keilir volcanic mountain in Hafnarfjorour Photo Iceland.is

There is a cloud of uncertainty hanging over the aviation industry in Iceland at the present time, the years of continuous growth has, it seems rather abruptly come to an end. The new keyword on the lips of Icelandic aviation managers and commentators is 'consolidation'. This rapid downturn in business has been aptly demonstrated by the latest figures released from the national carrier, Icelandair, showing a massive 32% drop in net profits during the third quarter. 

Load factor for the airline fell by 2% over the last quarter compared to the same period last year, surprising considering that the cost of flights has reduced somewhat over the year, mainly due to increased competition. The North American routes saw loads drop from 87.5% during the third-quarter in 2017 to 81.3% this year, however, the European routes saw increases, up to 89% from 84.4%. The carrier has also axed a number of routes, such as those from/ to Birmingham, Belfast and Glasgow as well as delaying the restart of a seasonal route to Cleveland, by at least two months. There is little doubt within the aviation sector that Icelandair will cut some more routes before this winter is out.

Another cloud over the Icelandair Group is the crash of the Air Niugini  Boeing 737-8BK aircraft, registered P2-PXE, on Friday 28 September 2018, that claimed the life of one of the male passengers on board. The aircraft was leased to the Loftlieder part of the group who in turn subleased it to Air Niugini.  Whilst there should be no financial liabilities for Loftlieder or the Icelandair Group as a whole, it could prove embarrassing if the current ongoing investigation finds any long-term mechanical or maintenance issues with the aircraft.

Photo Icelandair

Icelandair's interim President and CEO Bogi Nils Bogason admitted the results were not great but were in line with previously published expectations: “Our third-quarter results declined between years, but are in line with the EBITDA guidance published at the end of August.  EBITDA amounted to a total of USD 115 million, USD 41 million short of the figure for the third quarter of 2017.  Higher fuel prices, low average airfares and a less favourable passenger load factor are the principal reasons for the decline in performance."

WOW Air drops USA services, but will start a Vancouver service in June 2019

The Icelandic low-cost long-haul airline, WOW air has chosen Vancouver as its next Canadian destination the airline confirmed this week, just days after dropping five USA routes from its schedule.

WOW air is dropping its service from Reykjavik's Keflavik Airport to St Louis on the 6th January next year, with the airlines PR boss Svana Friðriksdóttir saying, “Unfortunately, it has to be said that St Louis was a disappointment for WOW Air this summer in terms of end results, with load factors not achieving the targets that were set for the route in the beginning, and compared to other markets in our network,” 

That news came as a surprise, not least to the management of St. Louis Lambert International Airport, "We’re disappointed because the response from customers across the St. Louis region was strong and we were told we were one of the airline’s top performing markets in the Midwest that were added last spring. The airline will not meet the criteria for airport incentives with its announcement to cease service in January." it said in a statement.  

But it isn't just St Louis that won't be seeing those purple planes next year, a number of seasonal services wil also not return next year.

Central Florida fun coming to the WOW route network soon!

The low-cost transatlantic airline from Iceland, WOW air, has announced it will open up a new route heading the USA way from 18th December this year.

The airline is expanding its route network with a service to Orlando International Airport (MCO) from its home base of  Keflavik International Airport. Orlando will become the airline's 14 US destination and this route will be operated on a seasonal basis three days a week between December and April. 

"We are thrilled to launch our service to and from Orlando this December giving Floridians the chance to experience magical winters and beautiful springs in Europe for an affordable price," said Skúli Mogensen, CEO and Founder of WOW air. "Passengers will also have the opportunity to take advantage of the WOW Stopover and make the most of their layover time by staying in Iceland for as long as they wish. It gives travelers the flexibility to break up a long-haul journey while taking in everything Iceland has to offer on their way to Europe, all on the same trip."

"Milan, Berlin, Edinburgh and New Delhi, these are just some of the exciting new destinations that are just one-stop away from Orlando with the arrival of Wow Airlines, says Phil Brown, Chief Executive Officer of the Greater Orlando Aviation Authority. "Wow's ability as an international low-cost carrier helps open doors for more business and leisure travel between Orlando and the world.".

  The Icelandic airline also recently announced its new route to Delhi in India would also start in December.

The airline has called time on its Tel Aviv route which comes to an end on 26th October. 

WOW to start service to Delhi

The Icelandic airline WOW is hoping to wow passengers with a new service to Indira Gandhi International Airport in New Delhi.  

In press releases, the Icelandic airline says the flight leaves the US to go to India, but it is actually from Iceland and the airline's flights from various US cities, connect with it.  It boasts "The new route will provide millions of Americans in seven major metro areas across the country an extremely affordable way to visit the lively city."

"We are very excited to start flying to New Delhi in December.  I am very happy with the feedback and demand we have gotten so far on our India flight and it's clear that there is a great need for affordable travel between North America and Delhi," said Skúli Mogensen, founder and CEO of WOW air. "Our mission is to enable everybody to fly by offering very reasonable prices to all our destinations and as a result hopefully more people will have the opportunity to see the World."

The airline is to use a brand new Airbus A330neo on the New Delhi route, which will also be fitted with the premium seats that have some extra legroom as well as a host of other benefits. 

WOW to end its Tel Aviv service.

The low-cost Icelandic airline Wow has confirmed it is putting a stop to its Tel Aviv route with the last flight due to land back in Iceland from the Israeli gateway on 25th October. Wow started the route in September 2017 and had been flying the route with an Airbus A321 three times each week.

The airline says it is ending the route due to operational, logistical and commercial considerations, although it hopes to head back to the city, maybe next year for the summer period.

WOW has indicated it wishes to expand its North American route network, which may offer higher loads over the winter period. The low-cost airline has not yet decided which destination will replace Tel Aviv in the A321's schedule. 

WoW heating up Iceland's price war.

Iceland's popular low-cost airline WOW air is stepping up its price war with  Icelandair with the introduction of special $99 one way fares from a number of US cities to its Keflavík International Airport hub.

The low price deal is available from Boston, Chicago, Cleveland, Dallas, New York, Pittsburg and San Francisco. Travel is valid in August, September and October.   "We are excited to invite visitors from the United States to experience all that Iceland has to offer in the fall," said Skúli Mogensen, founder and CEO of WOW air. "We continue to see demand for our affordable transatlantic offerings and we hope that Americans can take advantage of these low prices and enjoy Iceland in the coming months."

However, you'll have to be fast if you want to take advantage of that fare, for it only applies to 800 seats, on select flights, for travel between 6th August and 26th October and is subject to availability.  

Icelandair recently cited the increased capacity across the Atlantic and the reduced peak-season fare trend as reasons for a predicted reduction in its EBITDA for 2018. 

WOW air to introduce new route to Delhi.

WOW air,  one of Iceland's fast-growing and expanding airlines will soon connect Canadians to the hustling and bustling of colourful Delhi!  Yes, the low-cost airline has decided to open a new route from Iceland to Delhi starting this winter on 6th December 2018. 

Passengers from the US and Canada will be able to connect via the carriers Reykjavik hub and the new service will be on one of the airlines new Airbus A330's.   

Fares for the new service start from just $299 CAD / $199 USD and WOW premium starting at $899 CAD / $699 USD—a premium flight price you won't find on other airlines. 

"We are very excited to count New Delhi among our list of growing destinations outside of Europe," said Skúli Mogensen, CEO and founder of WOW air. "This addition expands on WOW air's promise to connect more travellers to as many diverse and exciting cities at the best possible prices."

The exciting new Delhi service will be available from Newark Liberty International Airport (EWR), Boston Logan International Airport (BOS), Baltimore/Washington International Airport (BWI), Chicago O'Hare International Airport (ORD), Pittsburgh International Airport (PIT), Detroit Metropolitan Airport (DTW), San Francisco International Airport (SFO), Los Angeles International Airport (LAX) and St. Louis Lambert International Airport (STL) in the USA and Montreal and Toronto in Canada, all via Iceland.

More details about Boston Logan Airport can be found here.