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WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 5:23 pm
by LAXintl
Bloomberg reports that WOW founder and CEO Skuli Mogensen is considering a sale of the company which would include a partnership that would "strengthen passenger numbers and cut costs.".

He says "big international partners have shown interest," and adds "any sales will take place over the next two years."


The Icelandic airline Wow Air is considering selling parts of operations to major international partners.
http://e24.no/naeringsliv/luftfart/bloo ... e/24131566

Iceland's WOW air considering sale; seeks strong partner
https://www.ch-aviation.com/portal/news ... ng-partner

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Considering WOW formation was more like that of a typical tech start-up by an entrepreneur than a legacy business, its no surprise the founder is now considering a potential sale and partnerships to monetize the business.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 6:02 pm
by TerminalD
FI is the obvious bet

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 6:10 pm
by Waterbomber
IMO the intial excitement of the start-up is starting to fade and they have finally realised that they don't know what they're doing.
Their fares can often be matched by a simple search on Momondo or Skyscanner, without having to compromise on free meals, carry-on, checked luggage. The concept is not bad, but they're just not competitive enough to differentiate themselves.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 6:15 pm
by hvusslax
TerminalD wrote:
FI is the obvious bet


I doubt FI would ever be interested in that. Icelandic competition authorities would never allow it either.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 6:17 pm
by carljanderson
Get out while the market is still hot. There is no way, IMO, that KEF and tourism in Iceland can maintain this constant growth.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 6:35 pm
by mercure1
Since he mentions "big" could there be interest from IAG or LH Group?

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 6:45 pm
by PatrickZ80
Could be Norwegian, their competitive TATL LCC. Norwegian does have a few flights to Iceland, but doesn't have a base there. If they acquire WOW Air they immediately have a strong base and the aircraft to operate it. In time WOW Air can be completely integrated into Norwegian.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 6:45 pm
by jumbojet
with there deep pockets, this screams ME3. Would say Emirates be allowed to use the WOW hub as a new spring board to the US? Can the runways at KEF handle an A380?

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 6:50 pm
by hvusslax
jumbojet wrote:
with there deep pockets, this screams ME3. Would say Emirates be allowed to use the WOW hub as a new spring board to the US? Can the runways at KEF handle an A380?


The runways can. The terminal apron and the taxiways to it can not.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 6:50 pm
by Kikko19
I'd say Hainan group ... Chinese have deep pockets,

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 7:41 pm
by lavalampluva
carljanderson wrote:
Get out while the market is still hot. There is no way, IMO, that KEF and tourism in Iceland can maintain this constant growth.

Iceland can most likely maintain what they have, but it might be topping out as far as growth. Just between FI and WW you can fly nonstop from just about every major airport east of the Mississippi.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 7:45 pm
by carljanderson
lavalampluva wrote:
but it might be topping out as far as growth.


And this is when some people would like to get out. Maximize the return and move on to the next thing.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 7:53 pm
by klakzky123
Is anyone familiar with rules of ownership for ECAA countries? If a non EU/non ECAA company buys WOW, do they still get to keep full rights to fly in Europe or do they lose access to the single aviation market?

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 8:00 pm
by LoftleidirDC8
I'm thinking Ryanair or Easjet. It builds an instant transatlantic network. The ownership issues should be lessened. KEF needs a major expansion if both FI and WW want to keep on expanding. Iceland tourism is reaching a saturation point as the enitre island's infrastruture is being maxed out.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 8:25 pm
by msycajun
WW and NK would be a powerful combination.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 9:01 pm
by Richard28
LoftleidirDC8 wrote:
I'm thinking Ryanair or Easjet. It builds an instant transatlantic network. The ownership issues should be lessened. KEF needs a major expansion if both FI and WW want to keep on expanding. Iceland tourism is reaching a saturation point as the enitre island's infrastruture is being maxed out.


Don't think so, U2 and FR only need some A321LR or similar and voila they can do the route non stop without needing the Iceland stop over.

Why buy an Icelandic airline and go one stop, and compete with direct flights from legacies, Norwegian plus possibly in the future US LCC's?

IMHO an Iceland stopover does not play into the U2/FR business model or strengths.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 9:18 pm
by jamsco99
Horrible airline with them blaming the delays caused by them stretching their fleet on weather. It took 9 months and numerous emails to get my entitled compensation for delay.. rant over

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 9:51 pm
by stl07
Kind of a hope but F9 or WN would be cool and would instantly give them TATL access and be a viable competitor to the US3 across the US and Atlantic

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 9:55 pm
by PatrickZ80
klakzky123 wrote:
Is anyone familiar with rules of ownership for ECAA countries? If a non EU/non ECAA company buys WOW, do they still get to keep full rights to fly in Europe or do they lose access to the single aviation market?


They're not allowed to buy it fully, their ownership stake would be reduced to 49% maximum. The other shares must always be in European hands. There are plenty of European airlines partly owned by non-European owners but never more than 49%.

No matter who owns it, as an Icelandic airline they still would keep the rights to fly everywhere an Icelandic airline is allowed to fly.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 10:13 pm
by A380MSN004
LAXintl wrote:
Bloomberg reports that WOW founder and CEO Skuli Mogensen is considering a sale of the company which would include a partnership that would "strengthen passenger numbers and cut costs.".

He says "big international partners have shown interest," and adds "any sales will take place over the next two years."


The Icelandic airline Wow Air is considering selling parts of operations to major international partners.
http://e24.no/naeringsliv/luftfart/bloo ... e/24131566

Iceland's WOW air considering sale; seeks strong partner
https://www.ch-aviation.com/portal/news ... ng-partner

=

Considering WOW formation was more like that of a typical tech start-up by an entrepreneur than a legacy business, its no surprise the founder is now considering a potential sale and partnerships to monetize the business.


Sounds like he's looking for a partnership because he doesn't make money and look for someone for taking over the business.
This airline seems to have bad reputation in terms of safety according to the threads about WOW on Pilots forums, huge turnover, extreme conditions etc.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 11:21 pm
by MR27122
lavalampluva wrote:
carljanderson wrote:
Get out while the market is still hot. There is no way, IMO, that KEF and tourism in Iceland can maintain this constant growth.

Iceland can most likely maintain what they have, but it might be topping out as far as growth. Just between FI and WW you can fly nonstop from just about every major airport east of the Mississippi.


Just my personal observation....you're both right.

The quality of WOW is subjective. We traveled upon them from BOS-KEF-DUB w/ a 4 night layover in Reykavik. We had to return a day early & flew from Cork-KEF-BOS (I I doubt Cork is gonna stick...how long have they been flying to Cork(?)...plane had 85 pax & change fee was $180 for Me/Wife/11yr old/5 yr old). I thought WOW was great. My Wife's sole criticism was the International Airport @ Reykjavik---a jank complaint in my opinion...it was fine. Our experience was seamless, inexpensive, on-time, etc.

However....I've had my life's fill of volcanic ash covered in moss landscapes. I'd skip inducement of FREE Iceland layover if I had a "do over". Ain't nothing FREE in Iceland. I'm fairly certain the cost of the 4x r/t bus from KEF-Hilton Nordica = 4 First Class seats on EI (did I get that code correct) from BOS-DUB.

I'm certain that Iceland has a ton to offer that I missed, well...I'm possibly positive that I might've missed "something" very appealing. My intent is not to hate-on Iceland. I think that WOW's success (pax load wise) has sort-of stunned the people of Iceland w/ the influx of tourists on a "FREE" layover. 3 nights would've been more than sufficient. Seriously, I don't know how Iceland's hospitality infrastructure can grow. Reykjavik was pleasant & had charm. The Blue Lagoon geo-thermo swim was great---for 1hr---the restaurant @ the Lagoon is fantastic. However---how do you truly build out from volcanic rock? Keflavik (sic) where airport is & we spent last evening due to a 6AM flight to DUB...has all the charm of a "small town" Newark NJ...eek, I can still smell the old dude who drove us to the airport in AM (but he didn't smell worse than some of the food...okay, very low blow, sorry Iceland). My impression (I could be totally wrong/misguided) is that WOW's NA growth will plateau in regards to the "free" layover. However, demand for ULCC trans-altantic flights will increase...but that airport doesn't appear to be capable of significant growth due to geography--it's on the water & I recall a lot of volcanic rock in the South. A remedy would be the "Domestic" airport---but that looked tiny w/ extremely limited growth potential & I think Citizens of Iceland would revolt at having a constant purple roar overhead in Reykjavik. Interesting thread...I'd never heard of Skyscanner!!!

Re: WOW Air founder considers sale; strategic partnerships

Posted: Mon Sep 04, 2017 11:51 pm
by TerminalD
hvusslax wrote:
TerminalD wrote:
FI is the obvious bet


I doubt FI would ever be interested in that. Icelandic competition authorities would never allow it either.

Germany has one airline now basically. WW has purposely cut off all the expansion options for FI both in terms of network and in terms of gate usage at KEF. It's going to be attempted. Not a fan of mergers, but 1+1=3.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Tue Sep 05, 2017 12:01 am
by flightking
How about Delta there buying airlines left and right .

Re: WOW Air founder considers sale; strategic partnerships

Posted: Tue Sep 05, 2017 12:48 am
by Cunard
Other than the recent investment in VS via AF/KLM with a 49% ownership by Delta which airlines are they buying 'left and right'?

Re: WOW Air founder considers sale; strategic partnerships

Posted: Tue Sep 05, 2017 1:49 am
by ua900
Let's remember that WW's business model is expressively aiming for ancillary revenue to exceed revenue from regular ticket sales. It goes well beyond just unbundling that you can see at say DY. That's a very different mentality from the legacies. If they were acquired by someone, the HQ staff could be more valuable to IAG or LH Group than then the fleet given the focus on ancillary products they'd bring to the table.

mercure1 wrote:
Since he mentions "big" could there be interest from IAG or LH Group?


Just do a sale to LH group so that they can grow EW ;-)

They are just now buying whatever EW components they can get from AB, A321s and A333s would be new to EW, but not to LH Group.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Tue Sep 05, 2017 2:07 am
by dmorbust
Cunard wrote:
Other than the recent investment in VS via AF/KLM with a 49% ownership by Delta which airlines are they buying 'left and right'?


How about....10% of AF/KLM, 49% of Aeromexico, 3.2% of China Eastern, and 9.5% of Gol Linhas...that enough for you? Also just for the record, DL owns 49% of VS out right on their own (AF/KLM is purchasing a separate 31% stake in VS from Branson's holdings).
That said, I agree there is no way DL even touches WOW with a 10 ft pole.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Tue Sep 05, 2017 3:19 am
by slcdeltarumd11
Waterbomber wrote:
IMO the intial excitement of the start-up is starting to fade and they have finally realised that they don't know what they're doing.
Their fares can often be matched by a simple search on Momondo or Skyscanner, without having to compromise on free meals, carry-on, checked luggage. The concept is not bad, but they're just not competitive enough to differentiate themselves.


WOW is not in trouble. Some might call them extremely un-passenger friendly, a horrible customer experience, etc etc but that is all by design, its a ULCC. No part of WOW seems to be in trouble, and they have SO much more potential. Places seemed really excited to land WOW, and passengers constantly show they book with their wallets.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Tue Sep 05, 2017 2:53 pm
by masseybrown
Indigo Partners, Frontier's owner, has taken other foreign ownership stakes (Wizz and Volaris), and is an experienced investor with deep pockets. A codeshare hook-up with Frontier might make a lot of sense, too, for both airlines.

Re: WOW Air founder considers sale; strategic partnerships

Posted: Tue Sep 05, 2017 4:29 pm
by flightking
Cunard wrote:
Other than the recent investment in VS via AF/KLM with a 49% ownership by Delta which airlines are they buying 'left and right'?

Just bought more of aero Mexico and another airline