WOW air boss “has plan B and C”

24.08.2018 - 11:07
Mynd með færslu
 Mynd: Eggert Þór Jónsson - RÚV
Skúli Mogensen, the CEO and owner of WOW air, says he has back-up plans in the event that his company’s bond issue to raise up to 12 billion krónur in additional funding does not go well. “Of course, I have a plan B and C, and even D,” Skúli says in an interview with RÚV.

He says, on the other hand, he believes there will be no need for them, as the bond issue is going well and the negotiations in the end will be about interest rates and contractual details; not whether the finance will be available or not. 

The financial position of both WOW air and Icelandair has been in the headlines recently and the Icelandic government is preparing a plan of action for a worst-case scenario in which one or both goes bankrupt and passengers are left stranded.  

Skúli was asked whether there is any chance of WOW air getting into serious financial trouble: “I believe that will not be the case, but I also believe it is entirely normal for the authorities to be monitoring closely.” 

WOW air is in a very good position and its financial strain is a part of its “growing pains”, Skúli says, and the bond issue is going to help: “As long as we sort that, which we are going to do, then the company has never looked better,” he says, adding that operationally the third quarter of the year is already well underway and looks better than the same time last year. It is normal for a company to not be in profit when it is growing as fast as WOW air has grown, Skúli says, citing as an example the fact that the company has been hiring an average of five new staff members every single day for the last three years, and continues to do so. 

“All the discussion about this bond issue is a little bit odd because it is clear we are making the tender because we believe we need to strengthen our liquidity position. That is right and that is obvious. Why are we doing it? Yes, because we believe we have products and a strategy and a direction that are good and solid and we want to carry on down this road,” Skúli explains. 

He says it is not time to stop the company growing, but that the rapid growth is being slowed down somewhat, and that the airline will continue its policy of lowering air fares. He expects competition in the aviation sector to remain tough and says he therefore sees no increase in the average cost of air fares on the horizon. 

 

Alexander Elliott
Project manager
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