Bankrupt Icelandic Airline WOW AIR Plans To Resume Flights This Fall With Help Of U.S. Investors (Yes, Seriously!)

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Roughly half a year after WOW AIR went bankrupt and thousands of people were stranded all over the place a group of U.S. investors plans to have the airline take off again as soon as next month.

In a press conference this week, Michele Ballarin, the chairman of the American aviation company USAerospace Associates said the airline’s first scheduled air route will be between Reykjavík and Washington D.C..

The investors as per the chairman’s information committed US$85 Million to restart Wow Air operations between Reykjavík and Washington Dulles using a U.S. operators certificate which still has to be applied for.

You can access the interview which took place in Reykjavik here.

The press conference itself was pretty much all over the place. You can watch the entire 17 minute statement including the Q&A for yourself and then build your own opinion about it.

Apart from the strong praises for Iceland Mrs. Ballarin (pictured above) stated that:

  • Flights would begin in October of 2019 with 2 aircraft and by summer of next year WOW intends to operate 10-12 Aircraft at the maximum as this is where (according to them) the profit margin peaks.
  • They would retain the WOW brand
  • It doesn’t take a lot [of money] to restart an airline! (!?!?)
  • Currently the team is working with a Michelin starred chef to design on board meals and the requested lounge space to be available at KEF airport.
  • Operations would start with a U.S. operating certificate but eventually the airlines wants to obtain an Icelandic one as well
  • She plans to have hubs in both countries and also thinks about a mixed fleet with both Airbus and Boeing aircraft
  • The acquiring entity of WOW is 51% Icelandic owned

A lot of plans and big words for $85 million which is actually not a lot of money to jump start an airline. I disagree with the notion of the investor groups representative here that “it doesn’t take much” to get it flying again.

They want to start operating within the next 6 weeks yet they need an operating certificate, staff, catering contracts and everything else that costs money. $85 million will be burned faster than you can say “Boo” and aircraft will be flying around pretty much empty during the first few months.

In order to have a good load factor you need an advance period to sell tickets. Sure you can put tickets on the market for $29 in order to fill up the planes and maybe some spontaneous travelers will buy them but does that really cover your cost? And who wants to travel between Washington D.C. and Iceland in the midst of winter? Late October is a pretty bad time for that city pair.

Operating with just two aircraft in the beginning is asking for trouble in case of mechanical issues. At least as long as WOW 2.0 would have a U.S. operating certificate they would be a U.S. airline and not liable for EC261 compensation for any delays or cancellations leaving the U.S., however the rule would apply for all flights ex Iceland as the country is a signatory to EC261/2004.

As of right now the old Wowair.com website doesn’t show any sign of life:

There is another website wowair.us but when I try to open that one it results in a blank page.

Conclusion

This entire project sounds a bit too rushed and optimistic. The funding is also very thing paired with extravagant plans for premium meals and airport lounges for all passengers. It’s not impossible to accomplish all this but it requires solid fares that are high enough to cover the expenses and a funding structure that lasts long enough to keep the airline afloat until it can carry itself through ticket sales.

Not that I’d personally buy any ticket on Wow 2.0 but after the last collapse I certainly wouldn’t recommend any friends or family to spend money on a ticket before it results in Grounding 2.0.

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