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Americans plan to resurrect WOW air

12.07.2019 - 11:12
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After news this week of plans to create a new Icelandic budget airline, it has been revealed this morning that an American aircraft operator has purchased all assets related to flight operations from the bankrupt estate of WOW air—paying handsomely and in full, up-front. Their goal is said to be to resurrect WOW air on the ashes of the old company.

According to Fréttablaðið sources, the purchasers are entirely unconnected to the people behind the WAB air idea that was reported earlier this week. It is possible that nobody connected to the old WOW air is involved in the purchase of assets from its estate. The deal is said to have run into hundreds of millions of krónur. 

The assets in the sale include the WOW air logo and branding, its website and domain, flight operation manuals, booking system, other software, cabin trolleys, computers, most of its tools and spare parts, and uniforms for crew and other staff. 

The plan is to “Resurrect low-cost flight operations to and from the country, both to Europe and the USA on the foundations of WOW air and in accordance with the philosophy that lay behind the low-cost model of WOW air,” the news states. 

One of the two administrators in charge of the WOW estate, Sveinn Andri Sveinsson, confirmed to Fréttablaðið that an agreed price has been paid in full, but would not comment further. The names of the investors have not been revealed, but it is believed they are wealthy American investors with years of airline experience on both sides of the Atlantic. 

Competing to bring back competition 

It therefore seems that two different groups are competing to create a new low-cost airline based on the legacy of WOW air. 

The Icelandic/Irish/Swiss group behind WAB air appear to have significant funding, as well as some key WOW air personnel on board. The American group, however, now owns much of the core of the old WOW air, and also appears to be well-funded. The editor of travel industry news website Tútisti.is Kristján Sigurjónsson says that the Americans appear to have the upper hand. 

“We really don’t know who is behind this latter group, the American one, and whether for example Skúli Mogensen, who was WOW air’s CEO, is involved; or even whether Indigo Partners, which is the American investment company that was looking to buy WOW air all of last winter, whether that company is involved with this,” Kristján told RÚV’s Rás 1 radio this morning. 

He believes it is unlikely that a large American airline is behind the bid, because they have a duty to report such action and none of them have so far. It is more likely to be an investment company, possibly Indigo Partners, which does not have a duty to go public. 

Kristján says the WAB air idea could be shaky given that an important part of its funding is supposed to come from Icelandic banks, and that the Icelandic banks are unlikely to want to invest heavily in aviation at this time, following losses made on WOW. It is also not known for certain whether the Irish investment company named in earlier news is definitely on-board with the project.

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