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Blerg
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Re: WOW Air/Indigo talks collapse, talks with Icelandair started

Mon Mar 25, 2019 5:47 am

davidjohnson6 wrote:
There is an existing (larger) WOW Air thread with extensive discussion about the talks with Indigo and Icelandair collapsing. Could I gently encourage people to divert their WOW Air thoughts and comments to the other thread ?
viewtopic.php?f=3&t=1407771


I would rather have two separate threads as that one is too long and it would take forever to go through it all.
 
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SRQKEF
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 7:36 am

klm617 wrote:
GalebG4 wrote:
lowfareair wrote:

To elaborate on the owner, he is someone who isn't willing to give up control based on Indigo backing out. This happens a lot in business, where the owner of a failing company refuses to sell, thinking that the new owner will mess things up too much, not realizing that it was his failings that caused the issues in the first place.


Yes, I would agree with you same thing for Naresh Goyal and Skúli Mogensen but you need to understand that when you are selling something especially in business you need to sell it at right time in order to get good price. Timing is everything in business, my father always used to tell me “when you are selling something at wrong time, then that is worth nothing”.
I still think that WOW is coolest brand ever!!!


I'm trusting that it's owner has a plan for a way forward for WOW Air because why not sell. Whatever FI and Indigo group was offering is way better than nothing. Why would he walk away empty handed when he doesn't need to perhaps he has an ace in his back pocket that no one knows about.


He didn't walk away, FI did. They stated that the debt was way too high with little to no assets to add up for it. It was not that he didn't want to sell WOW, it's just that nobody wants to buy them. To buy them would be like to voluntarily run into a burning building.
Nothing compares to taking off in an empty 757 with full thrust!
 
a350lover
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 8:22 am

Taking into account the population of Iceland, and the level of synergies between the both airliners, I'd assume even the Government would ideally aim for some sort of "agreement" so that in case WOW ends up folding down any time soon, the things can go organized and well. And that agreement may not be about FI buying WW cause it looks like they are not interested at all, but we are looking at an airline with problems which sees tones of competition at its home market (like Germania, like Primera, like many of the ones in trouble...)
 
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hvusslax
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 10:45 am

There is wild speculation currently about the status of TF-DOG, currently on the ground in YUL. WOW says there has been a malfunction but there are rumours that it may have grounded there by the lessor or other creditors.
 
airberlin2017
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 11:29 am

Yes, the Lessor Bocomm Leasing has seized TF-PRO in YUL - "due unpaid rates and contract breach"

Source: https://www.mbl.is/vidskipti/frettir/20 ... _felaginu/
 
icelander
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 11:34 am

Hvusslax... TF-DOG was sent to rescue the passengers from YUL that should have been on TF-PRO. Are you saying that plane has been grounded also? (It has been on the ground for a while now)
 
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mooseofspruce
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 12:20 pm

PRO and DOG were meant to operate today's KEF-LGW/DUB I guess; the other flights from the morning bank to FRA/CDG/AMS/BRU/SXF/CPH operated as scheduled and are returning.
I saw a flock of Moosen! Many much moosen! Out in the woods, in the wood-es, in the woodsen!
 
kyrone
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 12:51 pm

https://www.independent.co.uk/travel/ne ... 38206.html

This article is also claiming the Chicago and Pittsburgh flights are cancelled today...... Those cities were closed back in January..... Lovely lack of fact checking.....
 
smokeybandit
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 12:55 pm

WOW still lists those destinations on its flight status page for some reason.
 
kyrone
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 12:57 pm

http://www.ruv.is/frett/wow-air-fate-expected-today

According to this article, YUL is a tech issue... NOT seized by a lessor.

Depending on what is the actual case, the effect of misreporting (if that is the case) during such a critical time for this company can really do some heavy damage.
 
icelander
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 12:59 pm

TF-NOW has also been seized according to turisti.is: https://turisti.is/2019/03/9-thotur-eftir/

Also reported by morgunblaðið:
https://www.mbl.is/vidskipti/frettir/2019/03/25/onnur_vel_wow_air_kyrrsett/
Last edited by icelander on Mon Mar 25, 2019 1:02 pm, edited 1 time in total.
 
kyrone
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 1:01 pm

smokeybandit wrote:
WOW still lists those destinations on its flight status page for some reason.



You are right......

So misinformation leading to misreporting...
 
A380MSN004
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 1:51 pm

OB1504 wrote:
A380MSN004 wrote:
OB1504 wrote:
TF-GPA has been replaced by TF-NOW on the Cuba charters out of MIA. Is GPA going back to regular operations or being sold/returned to the lessor?


Who is operating those charters? WOW? Or TF-NOW is leased?


I think WOW is operating them on behalf of Gulfstream Air Charter.

A lot of the charter flights have been cancelled this weekend. Apparently there’s some sort of mechanical issue with TF-NOW.


Thanks
 
smokeybandit
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 2:03 pm

 
Provance
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 2:07 pm

I wouldn't hold my breath ... with Indigo Partners & FI walking away due to the total lack of assets I can't see anyone willing to accept this
EI, FR, BD, RE, UA, XL, US,
 
a350lover
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 2:17 pm

Next “sign” on whether things are right or wrong for them is going to be the departure bank to USA and Canada leaving from KEF between 3pm and 4pm LT. If these planes leave that may mean they have figured out things at least until tomorrow...
 
a350lover
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 2:59 pm

Several USA bound flights shown as boarding, guess it’s a good sign.
 
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klm617
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 3:13 pm

No need to worry guys WOW Air has got this. The little engine that could when most people didn't want them to succeed.
the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
 
SQ325
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 3:16 pm

Would you bet on this?
The Reports alone may deliver the final blow for WOW Air
 
Provance
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 3:59 pm

a350lover wrote:
Next “sign” on whether things are right or wrong for them is going to be the departure bank to USA and Canada leaving from KEF between 3pm and 4pm LT. If these planes leave that may mean they have figured out things at least until tomorrow...


They're in the air ... indicative that things are ok for at least another few hours/days
EI, FR, BD, RE, UA, XL, US,
 
Dispatcher9999
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 4:00 pm

caaardiff wrote:
Thomas Cook UK have acquired an A321 from WOW. Does anyone know what registration this is?


I've just had a quick scan through the rest of the thread to see if your question had been answered, but I couldn't find anything.
I'm also curious as to which WOW air/ex WOW air aircraft are joining the TCX group.
There's two in total, one to TCXUK and one to CFG, I believe they are non-sharkleted aircraft (I could potentially be wrong) but maybe that will help narrow it down.
 
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klm617
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 4:16 pm

SQ325 wrote:
Would you bet on this?
The Reports alone may deliver the final blow for WOW Air


I would yes. Irresponsible reporting only one flight canceled the rest of the schedule is operating as normal. Anyone who bought tickets for the up coming few weeks probably bought them a while ago so there is no danger of losing customer base and anything that no one books now for the summer can easy be recovered from once the summer season starts when they get this all sorted out Everyone wants to blame this on the low fares they offer but the truth is when you let an A330 sit for almost 24 hours and you move into markets like LAX, SFO, ORD and the like where you have to give away seats to stay competitive that's where the issue is. They have a much better network now than they had 6 months ago and they are going into the summer season now where they can make money again. I think any kind of WOW Air shut down would also effect FI and KEF negatively because once this airline fails it going to give a negative impression of the whole thing of using KEF as a hub. So it's in the best interest of everyone to see WOW Air come through this and then FI and WW stay out of each others back yards and they can both coexist doing what they do best offering low coast service to Europe for those who can't afford full priced airfare.
the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
 
smokeybandit
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 4:16 pm

TF-WIN is en route to BWI. We'll see if it ends up TF-LOST
 
icelander
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 5:02 pm

According to DV (Icelandic newspaper), TF-PRO has been returned to WOW. Some good news this afternoon it seems

https://www.dv.is/frettir/2019/3/25/kyrrsetningu-velar-wow-montreal-aflett/
 
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SRQKEF
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 5:07 pm

klm617 wrote:
SQ325 wrote:
Would you bet on this?
The Reports alone may deliver the final blow for WOW Air


I would yes. Irresponsible reporting only one flight canceled the rest of the schedule is operating as normal. Anyone who bought tickets for the up coming few weeks probably bought them a while ago so there is no danger of losing customer base and anything that no one books now for the summer can easy be recovered from once the summer season starts when they get this all sorted out Everyone wants to blame this on the low fares they offer but the truth is when you let an A330 sit for almost 24 hours and you move into markets like LAX, SFO, ORD and the like where you have to give away seats to stay competitive that's where the issue is. They have a much better network now than they had 6 months ago and they are going into the summer season now where they can make money again. I think any kind of WOW Air shut down would also effect FI and KEF negatively because once this airline fails it going to give a negative impression of the whole thing of using KEF as a hub. So it's in the best interest of everyone to see WOW Air come through this and then FI and WW stay out of each others back yards and they can both coexist doing what they do best offering low coast service to Europe for those who can't afford full priced airfare.


You do realise they lost a whopping 20 million USD in Q4 2018, AFTER the A330s left? And I can’t imagine Q1 2019 is any better. Reliable media outlets in Iceland are reporting that equity and cash flow are both very deep in the red. I unfortunately can’t see them lasting past Easter, the numbers just paint that bleak of a picture.
Nothing compares to taking off in an empty 757 with full thrust!
 
McG1967
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 5:26 pm

klm617 wrote:
SQ325 wrote:
Would you bet on this?
The Reports alone may deliver the final blow for WOW Air


I would yes. Irresponsible reporting only one flight canceled the rest of the schedule is operating as normal. Anyone who bought tickets for the up coming few weeks probably bought them a while ago so there is no danger of losing customer base and anything that no one books now for the summer can easy be recovered from once the summer season starts when they get this all sorted out.


Once the cash runs out it's over, regardless of your forward bookings or how loyal a customer base you have.

As soon as suppliers start asking for payments in cash, it will only be a matter of days.

When the airline I worked for in the UK went bust a decade ago, as soon as the credit facilities dried up it was over.
 
caaardiff
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 5:54 pm

Does anyone know if the loses of 2018 included additional costs of handing back the aircraft that were returned? There were a lot of new routes which must've taken up marketing and startup costs.
Now they've scaled back to the main A321 routes and cut loss making routes, is it too little too late for their current network to start making money, but enough to actually get them enough time to salvage the Airline?
If WOW are continually looking for investors, is it just a cash injection that's needed or is it just not working for them at all?
 
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klm617
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 6:23 pm

SRQKEF wrote:
klm617 wrote:
SQ325 wrote:
Would you bet on this?
The Reports alone may deliver the final blow for WOW Air


I would yes. Irresponsible reporting only one flight canceled the rest of the schedule is operating as normal. Anyone who bought tickets for the up coming few weeks probably bought them a while ago so there is no danger of losing customer base and anything that no one books now for the summer can easy be recovered from once the summer season starts when they get this all sorted out Everyone wants to blame this on the low fares they offer but the truth is when you let an A330 sit for almost 24 hours and you move into markets like LAX, SFO, ORD and the like where you have to give away seats to stay competitive that's where the issue is. They have a much better network now than they had 6 months ago and they are going into the summer season now where they can make money again. I think any kind of WOW Air shut down would also effect FI and KEF negatively because once this airline fails it going to give a negative impression of the whole thing of using KEF as a hub. So it's in the best interest of everyone to see WOW Air come through this and then FI and WW stay out of each others back yards and they can both coexist doing what they do best offering low coast service to Europe for those who can't afford full priced airfare.


You do realise they lost a whopping 20 million USD in Q4 2018, AFTER the A330s left? And I can’t imagine Q1 2019 is any better. Reliable media outlets in Iceland are reporting that equity and cash flow are both very deep in the red. I unfortunately can’t see them lasting past Easter, the numbers just paint that bleak of a picture.


The A330s were with WOW Air until the end of 2018. While 20 million to me and you might seem like a lot in this day and age in the corporate world that's a drop in the bucket less than what one aircraft costs. WOW Air is going to make it out of this and I know that's much to your dismay. Remember those losses are through the slowest travel time of the year have a little faith my friend a healthy WOW Air is good for the market. If they last until Easter they will last until fall if there was no hope the creditors would have put them out of business after the busy Christmas holiday season. WOW Air operations are not on track no more system melt downs and WOW Air is a well recognized brand now.
the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
 
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klm617
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 6:26 pm

caaardiff wrote:
Does anyone know if the loses of 2018 included additional costs of handing back the aircraft that were returned? There were a lot of new routes which must've taken up marketing and startup costs.
Now they've scaled back to the main A321 routes and cut loss making routes, is it too little too late for their current network to start making money, but enough to actually get them enough time to salvage the Airline?
If WOW are continually looking for investors, is it just a cash injection that's needed or is it just not working for them at all?


I agree they have a good sustainable network now and have pricing power in the stations they serve with a little more restraint and a responsible growth plan going forward they can do this. The only hiccup I see is they shouldn't have let the Gatwick slots go.
the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
 
arcticcruiser
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 8:04 pm

caaardiff wrote:
Does anyone know if the loses of 2018 included additional costs of handing back the aircraft that were returned? There were a lot of new routes which must've taken up marketing and startup costs.
Now they've scaled back to the main A321 routes and cut loss making routes, is it too little too late for their current network to start making money, but enough to actually get them enough time to salvage the Airline?
If WOW are continually looking for investors, is it just a cash injection that's needed or is it just not working for them at all?


Well all the aircraft that have been reposessed/returned are still on WOW air´s AOC. So I assume that end of lease costs are not covered there. $$$$ for 5 aircraft, 3 widebodies.

klm617 wrote:
SRQKEF wrote:
klm617 wrote:

I would yes. Irresponsible reporting only one flight canceled the rest of the schedule is operating as normal. Anyone who bought tickets for the up coming few weeks probably bought them a while ago so there is no danger of losing customer base and anything that no one books now for the summer can easy be recovered from once the summer season starts when they get this all sorted out Everyone wants to blame this on the low fares they offer but the truth is when you let an A330 sit for almost 24 hours and you move into markets like LAX, SFO, ORD and the like where you have to give away seats to stay competitive that's where the issue is. They have a much better network now than they had 6 months ago and they are going into the summer season now where they can make money again. I think any kind of WOW Air shut down would also effect FI and KEF negatively because once this airline fails it going to give a negative impression of the whole thing of using KEF as a hub. So it's in the best interest of everyone to see WOW Air come through this and then FI and WW stay out of each others back yards and they can both coexist doing what they do best offering low coast service to Europe for those who can't afford full priced airfare.


You do realise they lost a whopping 20 million USD in Q4 2018, AFTER the A330s left? And I can’t imagine Q1 2019 is any better. Reliable media outlets in Iceland are reporting that equity and cash flow are both very deep in the red. I unfortunately can’t see them lasting past Easter, the numbers just paint that bleak of a picture.


The A330s were with WOW Air until the end of 2018. While 20 million to me and you might seem like a lot in this day and age in the corporate world that's a drop in the bucket less than what one aircraft costs. WOW Air is going to make it out of this and I know that's much to your dismay. Remember those losses are through the slowest travel time of the year have a little faith my friend a healthy WOW Air is good for the market. If they last until Easter they will last until fall if there was no hope the creditors would have put them out of business after the busy Christmas holiday season. WOW Air operations are not on track no more system melt downs and WOW Air is a well recognized brand now.


Well they lost a whopping $167M in 2018. Is that high enough for ya?
 
kyrone
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 8:44 pm

klm617 wrote:
SRQKEF wrote:
klm617 wrote:

I would yes. Irresponsible reporting only one flight canceled the rest of the schedule is operating as normal. Anyone who bought tickets for the up coming few weeks probably bought them a while ago so there is no danger of losing customer base and anything that no one books now for the summer can easy be recovered from once the summer season starts when they get this all sorted out Everyone wants to blame this on the low fares they offer but the truth is when you let an A330 sit for almost 24 hours and you move into markets like LAX, SFO, ORD and the like where you have to give away seats to stay competitive that's where the issue is. They have a much better network now than they had 6 months ago and they are going into the summer season now where they can make money again. I think any kind of WOW Air shut down would also effect FI and KEF negatively because once this airline fails it going to give a negative impression of the whole thing of using KEF as a hub. So it's in the best interest of everyone to see WOW Air come through this and then FI and WW stay out of each others back yards and they can both coexist doing what they do best offering low coast service to Europe for those who can't afford full priced airfare.


You do realise they lost a whopping 20 million USD in Q4 2018, AFTER the A330s left? And I can’t imagine Q1 2019 is any better. Reliable media outlets in Iceland are reporting that equity and cash flow are both very deep in the red. I unfortunately can’t see them lasting past Easter, the numbers just paint that bleak of a picture.


The A330s were with WOW Air until the end of 2018. While 20 million to me and you might seem like a lot in this day and age in the corporate world that's a drop in the bucket less than what one aircraft costs. WOW Air is going to make it out of this and I know that's much to your dismay. Remember those losses are through the slowest travel time of the year have a little faith my friend a healthy WOW Air is good for the market. If they last until Easter they will last until fall if there was no hope the creditors would have put them out of business after the busy Christmas holiday season. WOW Air operations are not on track no more system melt downs and WOW Air is a well recognized brand now.



Wasn’t India being ran by a 330 until mid January?
 
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SRQKEF
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 8:46 pm

arcticcruiser wrote:
caaardiff wrote:
Does anyone know if the loses of 2018 included additional costs of handing back the aircraft that were returned? There were a lot of new routes which must've taken up marketing and startup costs.
Now they've scaled back to the main A321 routes and cut loss making routes, is it too little too late for their current network to start making money, but enough to actually get them enough time to salvage the Airline?
If WOW are continually looking for investors, is it just a cash injection that's needed or is it just not working for them at all?


Well all the aircraft that have been reposessed/returned are still on WOW air´s AOC. So I assume that end of lease costs are not covered there. $$$$ for 5 aircraft, 3 widebodies.

klm617 wrote:
SRQKEF wrote:

You do realise they lost a whopping 20 million USD in Q4 2018, AFTER the A330s left? And I can’t imagine Q1 2019 is any better. Reliable media outlets in Iceland are reporting that equity and cash flow are both very deep in the red. I unfortunately can’t see them lasting past Easter, the numbers just paint that bleak of a picture.


The A330s were with WOW Air until the end of 2018. While 20 million to me and you might seem like a lot in this day and age in the corporate world that's a drop in the bucket less than what one aircraft costs. WOW Air is going to make it out of this and I know that's much to your dismay. Remember those losses are through the slowest travel time of the year have a little faith my friend a healthy WOW Air is good for the market. If they last until Easter they will last until fall if there was no hope the creditors would have put them out of business after the busy Christmas holiday season. WOW Air operations are not on track no more system melt downs and WOW Air is a well recognized brand now.


Well they lost a whopping $167M in 2018. Is that high enough for ya?


$167M is especially high since they don’t even own a single aircraft, or any tangible assets for that matter! Aside from maybe the AMS slots and their HQ building, which probably don’t even cover $1M...things don’t look good.
Nothing compares to taking off in an empty 757 with full thrust!
 
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SRQKEF
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 8:47 pm

kyrone wrote:
klm617 wrote:
SRQKEF wrote:

You do realise they lost a whopping 20 million USD in Q4 2018, AFTER the A330s left? And I can’t imagine Q1 2019 is any better. Reliable media outlets in Iceland are reporting that equity and cash flow are both very deep in the red. I unfortunately can’t see them lasting past Easter, the numbers just paint that bleak of a picture.


The A330s were with WOW Air until the end of 2018. While 20 million to me and you might seem like a lot in this day and age in the corporate world that's a drop in the bucket less than what one aircraft costs. WOW Air is going to make it out of this and I know that's much to your dismay. Remember those losses are through the slowest travel time of the year have a little faith my friend a healthy WOW Air is good for the market. If they last until Easter they will last until fall if there was no hope the creditors would have put them out of business after the busy Christmas holiday season. WOW Air operations are not on track no more system melt downs and WOW Air is a well recognized brand now.



Wasn’t India being ran by a 330 until mid January?


They did have a single A330 until the 21st of January, their other two were returned in October 2018 IIRC.
Nothing compares to taking off in an empty 757 with full thrust!
 
arcticcruiser
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Re: WOW Financial Discussion Thread

Mon Mar 25, 2019 8:49 pm

SRQKEF wrote:
arcticcruiser wrote:
caaardiff wrote:
Does anyone know if the loses of 2018 included additional costs of handing back the aircraft that were returned? There were a lot of new routes which must've taken up marketing and startup costs.
Now they've scaled back to the main A321 routes and cut loss making routes, is it too little too late for their current network to start making money, but enough to actually get them enough time to salvage the Airline?
If WOW are continually looking for investors, is it just a cash injection that's needed or is it just not working for them at all?


Well all the aircraft that have been reposessed/returned are still on WOW air´s AOC. So I assume that end of lease costs are not covered there. $$$$ for 5 aircraft, 3 widebodies.

klm617 wrote:

The A330s were with WOW Air until the end of 2018. While 20 million to me and you might seem like a lot in this day and age in the corporate world that's a drop in the bucket less than what one aircraft costs. WOW Air is going to make it out of this and I know that's much to your dismay. Remember those losses are through the slowest travel time of the year have a little faith my friend a healthy WOW Air is good for the market. If they last until Easter they will last until fall if there was no hope the creditors would have put them out of business after the busy Christmas holiday season. WOW Air operations are not on track no more system melt downs and WOW Air is a well recognized brand now.


Well they lost a whopping $167M in 2018. Is that high enough for ya?


$167M is especially high since they don’t even own a single aircraft, or any tangible assets for that matter! Aside from maybe the AMS slots and their HQ building, which probably don’t even cover $1M...things don’t look good.


It has been reported they have not paid rent on their HQ office space for 3 months.
 
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madpropsyo
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 12:10 am

This is an awful lot of losses for a small economy to bear... What kind of collateral damage could WOW do to Icelandic banks if they go under considering how much they’ve lost and the fact that they seemingly aren’t paying for anything at this point? $167 million is almost 1% of Iceland’s GDP...
 
Ryanair01
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 6:45 am

Very bad news for Iceland. The two big tourist markets are US and UK, both have air seats down by more than a quarter year on year, not just due to Wow. If you take Wow out of the picture (mainly in secondary markets now), it will compound that even further.

Out of the UK fares last year were in the sub £100 return range, this year fares are about £200 return. That will be pretty devastating for Iceland hotels, restaurants, bars and tour operators.
 
Blerg
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 6:54 am

I never liked WOW, they seemed way too ambitious and arrogant about who they were and what they were doing. As if aviation was an easy game and as if we've been all waiting for them to come along and rescue us from mean legacy carriers. Yes, sure, we would all like to fly across the Atlantic for €150 but it's not realistic or commercially viable. In my opinion they only created problems for responsible and well-established carriers who have built their business model over many years as is the case with FI.
 
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vhtje
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 7:20 am

Blerg wrote:
I never liked WOW, they seemed way too ambitious and arrogant about who they were and what they were doing. As if aviation was an easy game and as if we've been all waiting for them to come along and rescue us from mean legacy carriers. Yes, sure, we would all like to fly across the Atlantic for €150 but it's not realistic or commercially viable. In my opinion they only created problems for responsible and well-established carriers who have built their business model over many years as is the case with FI.


Of course the other side of that argument is that business needs disruptors to come along and to shake things up and find new ways of doing things. This is how we got Apple disrupting the mobile phone market, Uber disrupting the taxi industry, etc.

WOW’s attempt to disrupt aviation hasn’t worked out, but it would be a shame if WOW’s demise discourages other disruptors from taking on the aviation industry.
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
Blerg
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 7:46 am

vhtje wrote:
Blerg wrote:
I never liked WOW, they seemed way too ambitious and arrogant about who they were and what they were doing. As if aviation was an easy game and as if we've been all waiting for them to come along and rescue us from mean legacy carriers. Yes, sure, we would all like to fly across the Atlantic for €150 but it's not realistic or commercially viable. In my opinion they only created problems for responsible and well-established carriers who have built their business model over many years as is the case with FI.


Of course the other side of that argument is that business needs disruptors to come along and to shake things up and find new ways of doing things. This is how we got Apple disrupting the mobile phone market, Uber disrupting the taxi industry, etc.

WOW’s attempt to disrupt aviation hasn’t worked out, but it would be a shame if WOW’s demise discourages other disruptors from taking on the aviation industry.


Disrupting is one thing but going against extremely well-established carriers out of a base that's already home to a successful business is folly. No one should be surprised it ended up like this. If we want to preserve competition on transatlantic flights then we might want to look at breaking up JVs rather than encouraging carriers at launching LCC flights because in the end they will end up like Primera, Norwegian or WOW.
 
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klm617
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 12:32 pm

Blerg wrote:
vhtje wrote:
Blerg wrote:
I never liked WOW, they seemed way too ambitious and arrogant about who they were and what they were doing. As if aviation was an easy game and as if we've been all waiting for them to come along and rescue us from mean legacy carriers. Yes, sure, we would all like to fly across the Atlantic for €150 but it's not realistic or commercially viable. In my opinion they only created problems for responsible and well-established carriers who have built their business model over many years as is the case with FI.


Of course the other side of that argument is that business needs disruptors to come along and to shake things up and find new ways of doing things. This is how we got Apple disrupting the mobile phone market, Uber disrupting the taxi industry, etc.

WOW’s attempt to disrupt aviation hasn’t worked out, but it would be a shame if WOW’s demise discourages other disruptors from taking on the aviation industry.


Disrupting is one thing but going against extremely well-established carriers out of a base that's already home to a successful business is folly. No one should be surprised it ended up like this. If we want to preserve competition on transatlantic flights then we might want to look at breaking up JVs rather than encouraging carriers at launching LCC flights because in the end they will end up like Primera, Norwegian or WOW.


Your assumption that WOW Air is folding is very premature. Those are exactly the type of airlines that need competition those airlines that are well established. The issue is not WOW Air the issue is dumping capacity in already over saturated markets where they have to basically give seats away to fill planes. There are many untapped markets where both these airlines could coexist comfortably but when you both compete for a market like CLE and DFW that have no track record that they are viable you are just asking to accumulate losses and one airline using a widebody and allowing it to sit on the ground for almost 24 hours making no money. WOW should have stuck to markets where they could go back and forth to KEF without aircraft sitting on the ground not making money. CLT, RDU, and the like where FI wasn't flying WOW Air is a great airline for college towns where young people could go out and see Europe.
the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
 
mjoelnir
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 12:52 pm

https://www.mbl.is/vidskipti/frettir/20 ... krofuhafa/

WOW seems to have made an agreement with its creditors, that most of the dept is changed into stock in WOW. So it seems that the operation of WOW Air is secured in the short term. The creditors will provide additional cash to facilitate the operation.
 
davidjohnson6
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 1:31 pm

So the existing shareholders are largely wiped out and sone of the debt becomes equity, reducing the bill for interest payments

But how will Wow actually make money from its core business ? I just don't see what structural change will turn them into a profitable business
 
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Polot
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 1:51 pm

davidjohnson6 wrote:
So the existing shareholders are largely wiped out and sone of the debt becomes equity, reducing the bill for interest payments

But how will Wow actually make money from its core business ? I just don't see what structural change will turn them into a profitable business

This is just a move to buy WOW time to find a proper investor/acquirer.
 
arcticcruiser
Posts: 466
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 1:58 pm

mjoelnir wrote:
https://www.mbl.is/vidskipti/frettir/2019/03/26/wow_naer_samkomulagi_vid_krofuhafa/

WOW seems to have made an agreement with its creditors, that most of the dept is changed into stock in WOW. So it seems that the operation of WOW Air is secured in the short term. The creditors will provide additional cash to facilitate the operation.


Well according to their own announcement https://wowair.is/investors/media/, they have made a deal with the bondholders. Not with all creditors. The bondholders are those who were fooled to lend WOW €50M last fall. Just before crisis erupted. We are talking about a quarter of their dept here... What will the real creditors do?
 
UPNYGuy
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 2:32 pm

Someone earlier posted that wow going bust is approx 1% of the Icelandic GDP. Is it possible that wow is in the ‘too big to fail’ state? If something happens, it could have a ripple effect.
 
ScottB
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 3:21 pm

klm617 wrote:
The issue is not WOW Air the issue is dumping capacity in already over saturated markets where they have to basically give seats away to fill planes. There are many untapped markets where both these airlines could coexist comfortably but when you both compete for a market like CLE and DFW that have no track record that they are viable you are just asking to accumulate losses and one airline using a widebody and allowing it to sit on the ground for almost 24 hours making no money. WOW should have stuck to markets where they could go back and forth to KEF without aircraft sitting on the ground not making money. CLT, RDU, and the like where FI wasn't flying WOW Air is a great airline for college towns where young people could go out and see Europe.


No, the real issue is that the transatlantic leisure market is highly seasonal. The somewhat less seasonal high end of the market is captured by the legacy carriers/alliances with their business class products and breadth of network. A carrier like WOW has expensive new planes; high lease/mortgage payments are a problem if you need to keep the planes on the ground due to lack of demand. FI, with their older fleet, can afford to reduce capacity and drop markets in the low season since the carrying costs of long-since depreciated aircraft are low.

College towns aren't a great option, either, because students aren't really making frequent trips to Europe (they don't have the funds and they're also supposed to be going to class most of the time). Sure, you can probably fill a plane or two with unidirectional traffic at the start or end of a break, but you're going to be flying empty in October or February.
 
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SRQKEF
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 3:22 pm

UPNYGuy wrote:
Someone earlier posted that wow going bust is approx 1% of the Icelandic GDP. Is it possible that wow is in the ‘too big to fail’ state? If something happens, it could have a ripple effect.


What he posted wasn't that WOW going bust is 1% of the Icelandic GDP, but that their losses last year amounted to 1% of the Icelandic GDP. I'm not sure what their actual effect on Icelandic GDP would be if a potential bankruptcy would happen. An airline with 9 A320 series aircraft definitely isn't too big to fail though, no matter which the country is. Plus, there's no way of predicting how much positive impact it would have on FI if WOW, and the unsustainable low fares and uncertainty they bring with them, finally crumbles. That positive upswing could very well balance things out long term.
Nothing compares to taking off in an empty 757 with full thrust!
 
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SRQKEF
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 3:27 pm

klm617 wrote:
Blerg wrote:
vhtje wrote:

Of course the other side of that argument is that business needs disruptors to come along and to shake things up and find new ways of doing things. This is how we got Apple disrupting the mobile phone market, Uber disrupting the taxi industry, etc.

WOW’s attempt to disrupt aviation hasn’t worked out, but it would be a shame if WOW’s demise discourages other disruptors from taking on the aviation industry.


Disrupting is one thing but going against extremely well-established carriers out of a base that's already home to a successful business is folly. No one should be surprised it ended up like this. If we want to preserve competition on transatlantic flights then we might want to look at breaking up JVs rather than encouraging carriers at launching LCC flights because in the end they will end up like Primera, Norwegian or WOW.


Your assumption that WOW Air is folding is very premature. Those are exactly the type of airlines that need competition those airlines that are well established. The issue is not WOW Air the issue is dumping capacity in already over saturated markets where they have to basically give seats away to fill planes. There are many untapped markets where both these airlines could coexist comfortably but when you both compete for a market like CLE and DFW that have no track record that they are viable you are just asking to accumulate losses and one airline using a widebody and allowing it to sit on the ground for almost 24 hours making no money. WOW should have stuck to markets where they could go back and forth to KEF without aircraft sitting on the ground not making money. CLT, RDU, and the like where FI wasn't flying WOW Air is a great airline for college towns where young people could go out and see Europe.


You're focusing too much on the emotional side of things. Yes, for college students on a low budget having an airline such as WOW that offers cheap fares to Europe is certainly a great thing. However, those same cheap fares are too often below the cost of operating the flight for the airline, and don't make up for a good business model. The thing is, a company isn't viable just because there are people out there that like what it has to offer. If there was a steakhouse that suddenly decided to offer all you can eat Kobe beef for 20$, I'm sure they'd fill the place out every night, but I'm just as sure they'd go out of business very quickly.

When you're losing 50$ on every single seat you sell (like WOW did last year when you divide their pax numbers with their losses) that's simply unsustainable.
Nothing compares to taking off in an empty 757 with full thrust!
 
UPNYGuy
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 6:09 pm

SRQKEF wrote:
UPNYGuy wrote:
Someone earlier posted that wow going bust is approx 1% of the Icelandic GDP. Is it possible that wow is in the ‘too big to fail’ state? If something happens, it could have a ripple effect.


What he posted wasn't that WOW going bust is 1% of the Icelandic GDP, but that their losses last year amounted to 1% of the Icelandic GDP. I'm not sure what their actual effect on Icelandic GDP would be if a potential bankruptcy would happen. An airline with 9 A320 series aircraft definitely isn't too big to fail though, no matter which the country is. Plus, there's no way of predicting how much positive impact it would have on FI if WOW, and the unsustainable low fares and uncertainty they bring with them, finally crumbles. That positive upswing could very well balance things out long term.



Thanks for straightening that out. I misread that post. And when I said “too big to fail” I was talking about what the debt would do to Iceland if they went bust, not the size of the fleet. Should have said (weird as it sounds) too bankrupt to fail in a country with a small GDP. But you are correct though... might cause things to balance out.
 
LHA320
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Re: WOW Financial Discussion Thread

Tue Mar 26, 2019 6:15 pm

Does anyone know their load factors? Are they flying around with half empty A321? I remember they were founded with the idea of offering cheap TATL via KEF, seems like the overestimated the demand...
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