FlyingElvii
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Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 22, 2019 9:41 pm

Low airfares drive increased tourism. And when the low fares go away, so do the tourists driving the economy. Whodathunkit….
http://www.msn.com/en-us/money/companie ... ocid=ientp
 
traindoc
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 22, 2019 9:58 pm

Iceland is an interesting place to visit, in that the air fares are cheap, but everything else is expensive once you get on the ground there. Also, many people there are unhappy with the tourism boom because of the huge crowds of tourists. As they say, be careful what you wish for!
 
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Blimpie
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 22, 2019 10:00 pm

Yeah, I saw this come over my desk and rolled my eyes. I don't have any does what Bloomberg does anymore. Iceland's stock in the tourist industry has been projected to dry up long before WOW ceased operation. I recall penning an article two years ago on the tourism departments projected figures for a reduction in tourism revenue, and these numbers seem to be par for the course.

While, I'm sure WOW's failure may have had some impact on on tourism, I really think this article is overstating WOW's collapse as a factor. Iceland's tourism has been a bubble for a few years now, and a large portion of the growth in tourism they have seen were the results of Icelandair's aggressive marketing and stay-over options.

I really have to wonder what some of the other newsrooms are doing anymore. It really feels like the inmates are running the asylum some days. Now, if you don't mind me, some numpty intern has sent me his Angry Birds fanfic instead of an article on Fiji.
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MIflyer12
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 22, 2019 10:05 pm

More sloppy Bloomberg drivel. What's relevant isn't total KEF passenger count but KEF destination count. Further, year-on-year changes in count had gone negative even before WOW stopped flying. WOW's end is only a small part of the problem.

https://www.isavia.is/en/corporate/abou ... statistics
 
chrisp390
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 22, 2019 10:07 pm

Garbage reporting, why is this even an article? This has very little to do with the collapse of WOW.
 
KentB27
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 22, 2019 10:46 pm

What a bunch of BS. Iceland's tourism boom has been at an unsustainable level for at least several years now. Tourism was and still is going to decline in Iceland whether WOW Air collapsed or not.
 
canyonblue17
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 22, 2019 11:07 pm

I don't understand why people think Iceland is SOOOO expensive. I've been there. Stayed at two 3/4 star hotels and paid under $189/night. Rented a mid-sized car for a week (including extra insurance) and paid less than $300. Found plenty of low cost good food choices (especially the famous Bill Clinton hot dog stand) and many activities (including boat tours) that were similar in price to things I've done in the States. And my stay was at the end of May - when the weather was turning plenty comfortable. I've been to a bunch of other Island countries that are much more expensive - most of them in the Pacific Ocean. By the way - I flew on WOW from EWR and had a great experience both ways.
negative ghostrider the pattern is full
 
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SRQKEF
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 22, 2019 11:17 pm

While I usually try to stay away from expletives, this article is quite plainly bullsh**. The Icelandic economy is slowing done for sure, but saying it's a) crashing and b) it's due to WOW is laughable. The tourism industry merely slowing down towards the right size with sustainable fares.

Plus, it's mainly the number of transfer pax that has plummeted. O&D pax were less than 10% down in April, and while they might go further down this summer due to S18 being WOW's largest operating period, it's still mostly transfer pax that were lost with the loss of WOW. The type of LCC pax that would've only travelled here on WOW are budget travellers that wouldn't have spent too much money towards the Icelandic economy anyway.
Nothing compares to taking off in an empty 757 with full thrust!
 
flyoregon
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 22, 2019 11:34 pm

SRQKEF wrote:
While I usually try to stay away from expletives, this article is quite plainly bullsh**. The Icelandic economy is slowing done for sure, but saying it's a) crashing and b) it's due to WOW is laughable. The tourism industry merely slowing down towards the right size with sustainable fares.

Plus, it's mainly the number of transfer pax that has plummeted. O&D pax were less than 10% down in April, and while they might go further down this summer due to S18 being WOW's largest operating period, it's still mostly transfer pax that were lost with the loss of WOW. The type of LCC pax that would've only travelled here on WOW are budget travellers that wouldn't have spent too much money towards the Icelandic economy anyway.


I don’t think it’s just the Icelandic economy slowing down. In Oregon, the economy is slowing down at a recognizable rate. I’d hardly say it’s near collapsing though. Just a mellow throttle back.
 
dampfnudel
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 22, 2019 11:42 pm

What a joke making WOW a scapegoat for the issues the Icelandic economy is having.
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SRQKEF
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 12:13 am

flyoregon wrote:
SRQKEF wrote:
While I usually try to stay away from expletives, this article is quite plainly bullsh**. The Icelandic economy is slowing done for sure, but saying it's a) crashing and b) it's due to WOW is laughable. The tourism industry merely slowing down towards the right size with sustainable fares.

Plus, it's mainly the number of transfer pax that has plummeted. O&D pax were less than 10% down in April, and while they might go further down this summer due to S18 being WOW's largest operating period, it's still mostly transfer pax that were lost with the loss of WOW. The type of LCC pax that would've only travelled here on WOW are budget travellers that wouldn't have spent too much money towards the Icelandic economy anyway.


I don’t think it’s just the Icelandic economy slowing down. In Oregon, the economy is slowing down at a recognizable rate. I’d hardly say it’s near collapsing though. Just a mellow throttle back.


Agreed, the world economy has been slowing down as a whole recently. However, in the same vein as you say, it's not as if 2008 is happening all over again here. Iceland is still one of the most prosperous countried in the world and the economy is just settling down into a reasonable position.
Nothing compares to taking off in an empty 757 with full thrust!
 
klm617
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 12:21 am

I am sorry but allowing WOW Air to collapse was not in anyone's best interest except Icelandair. Sorry that's a fact toursism and jobs in Iceland suffer when you take away almost 50% of the capacity why is that so hard to understand. WOW Air provided a product that was beneficial to many and I stand with WOW Air and what they intended to do.
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...
 
aamd11
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 12:56 am

klm617 wrote:
I am sorry but allowing WOW Air to collapse was not in anyone's best interest except Icelandair. Sorry that's a fact toursism and jobs in Iceland suffer when you take away almost 50% of the capacity why is that so hard to understand. WOW Air provided a product that was beneficial to many and I stand with WOW Air and what they intended to do.

Allowing WOW to collapse is what the market demanded. Potential investors looked over the books, looked over them twice and all walked away. The business was obviously far from sustainable, so who should foot the bill to keep it going? Would the Icelandic government want to splash the cash on an unviable business venture just to keep tourism numbers up? Particularly when you consider that the tourism boom Iceland has enjoyed could put enormous strain on the country's infrastructure? That's throwing good money after bad.

This is a country of 340,000 people.
Almost 2,200,000 visitors made an overnight stay in Iceland in 2017.
 
klm617
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 2:21 am

aamd11 wrote:
klm617 wrote:
I am sorry but allowing WOW Air to collapse was not in anyone's best interest except Icelandair. Sorry that's a fact toursism and jobs in Iceland suffer when you take away almost 50% of the capacity why is that so hard to understand. WOW Air provided a product that was beneficial to many and I stand with WOW Air and what they intended to do.

Allowing WOW to collapse is what the market demanded. Potential investors looked over the books, looked over them twice and all walked away. The business was obviously far from sustainable, so who should foot the bill to keep it going? Would the Icelandic government want to splash the cash on an unviable business venture just to keep tourism numbers up? Particularly when you consider that the tourism boom Iceland has enjoyed could put enormous strain on the country's infrastructure? That's throwing good money after bad.

This is a country of 340,000 people.
Almost 2,200,000 visitors made an overnight stay in Iceland in 2017.


Icelandair was more than happy to let them fold. The business plan going forward was potentially sustainable it's just the rate at which they expanded that cost them. With the network they operated at the end the likely hood of them succeeding was pretty good it's just that Icelandair wanted them out of the way. The jobs that it created was good for Iceland on all levels and we are now seeing the fallout from that. Even the government of Iceland urged Icelandair into talks to save WOW that's how important it was to the economy of Iceland.
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...
 
Lapplander800
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 3:33 am

klm617 wrote:
aamd11 wrote:
klm617 wrote:
I am sorry but allowing WOW Air to collapse was not in anyone's best interest except Icelandair. Sorry that's a fact toursism and jobs in Iceland suffer when you take away almost 50% of the capacity why is that so hard to understand. WOW Air provided a product that was beneficial to many and I stand with WOW Air and what they intended to do.

Allowing WOW to collapse is what the market demanded. Potential investors looked over the books, looked over them twice and all walked away. The business was obviously far from sustainable, so who should foot the bill to keep it going? Would the Icelandic government want to splash the cash on an unviable business venture just to keep tourism numbers up? Particularly when you consider that the tourism boom Iceland has enjoyed could put enormous strain on the country's infrastructure? That's throwing good money after bad.

This is a country of 340,000 people.
Almost 2,200,000 visitors made an overnight stay in Iceland in 2017.


Icelandair was more than happy to let them fold. The business plan going forward was potentially sustainable it's just the rate at which they expanded that cost them. With the network they operated at the end the likely hood of them succeeding was pretty good it's just that Icelandair wanted them out of the way. The jobs that it created was good for Iceland on all levels and we are now seeing the fallout from that. Even the government of Iceland urged Icelandair into talks to save WOW that's how important it was to the economy of Iceland.


What has Icelandair got to do with WOW's collapse?
 
Busyboy2
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 4:08 am

SRQKEF wrote:
flyoregon wrote:
SRQKEF wrote:
While I usually try to stay away from expletives, this article is quite plainly bullsh**. The Icelandic economy is slowing done for sure, but saying it's a) crashing and b) it's due to WOW is laughable. The tourism industry merely slowing down towards the right size with sustainable fares.

Plus, it's mainly the number of transfer pax that has plummeted. O&D pax were less than 10% down in April, and while they might go further down this summer due to S18 being WOW's largest operating period, it's still mostly transfer pax that were lost with the loss of WOW. The type of LCC pax that would've only travelled here on WOW are budget travellers that wouldn't have spent too much money towards the Icelandic economy anyway.


I don’t think it’s just the Icelandic economy slowing down. In Oregon, the economy is slowing down at a recognizable rate. I’d hardly say it’s near collapsing though. Just a mellow throttle back.


Agreed, the world economy has been slowing down as a whole recently. However, in the same vein as you say, it's not as if 2008 is happening all over again here. Iceland is still one of the most prosperous countried in the world and the economy is just settling down into a reasonable position.



The world economy is slowing down? haha! in what world do you live in? I'm calling you out on that. In the USA its full steam ahead. The United States is only 5% of the world's population and 10% of the world's landmass but just shy of 25% of the world wealth. Everyone I know has more work than they can handle.
 
musman9853
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 4:17 am

flyoregon wrote:
SRQKEF wrote:
While I usually try to stay away from expletives, this article is quite plainly bullsh**. The Icelandic economy is slowing done for sure, but saying it's a) crashing and b) it's due to WOW is laughable. The tourism industry merely slowing down towards the right size with sustainable fares.

Plus, it's mainly the number of transfer pax that has plummeted. O&D pax were less than 10% down in April, and while they might go further down this summer due to S18 being WOW's largest operating period, it's still mostly transfer pax that were lost with the loss of WOW. The type of LCC pax that would've only travelled here on WOW are budget travellers that wouldn't have spent too much money towards the Icelandic economy anyway.


I don’t think it’s just the Icelandic economy slowing down. In Oregon, the economy is slowing down at a recognizable rate. I’d hardly say it’s near collapsing though. Just a mellow throttle back.



Yeah the bond yeild curve inverted a few months ago. Usually a good indicator of an imminent recession.

As for the article, I personally don't think wow's collapse was the sole reason Iceland's economy took a hit but it certainly doesn't help.
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polaris
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 4:34 am

Over the last number of years, tourism to Iceland increased, in part, due to the popularity of "Game of Thrones". The series was partly filmed in Iceland. Amazing what popular culture can do. (Same thing happened with New Zealand and "Lord of the Rings".) Icelandic locals were none too pleased when the huge influx of tourists started to damage the natural beauty of the country. Tourism will drop and stabilize now that the series has ended. Was it WOW, was it "Game of Thrones", was it low airfares, was it the increase in tourists that brought down airfares, did unsustainable airfares bring down WOW...? Thoughts to ponder. Articles to write.
 
ewt340
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 4:39 am

I guess it's for Icelandair to do the dirty job now.
 
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Jouhou
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 7:38 am

Busyboy2 wrote:
SRQKEF wrote:
flyoregon wrote:

I don’t think it’s just the Icelandic economy slowing down. In Oregon, the economy is slowing down at a recognizable rate. I’d hardly say it’s near collapsing though. Just a mellow throttle back.


Agreed, the world economy has been slowing down as a whole recently. However, in the same vein as you say, it's not as if 2008 is happening all over again here. Iceland is still one of the most prosperous countried in the world and the economy is just settling down into a reasonable position.



The world economy is slowing down? haha! in what world do you live in? I'm calling you out on that. In the USA its full steam ahead. The United States is only 5% of the world's population and 10% of the world's landmass but just shy of 25% of the world wealth. Everyone I know has more work than they can handle.


I don't think you understand what "slowing down" means. Growth is slowing. The economy has not gone flat yet nor is it contracting. Also the whole full employment thing limits economic growth.

Anyways with a national population smaller than Cleveland Ohio, it's not far fetched to think the collapse of WOW would have a large impact on Iceland. I do think they will manage though, they really didn't have the infrastructure for the surge in visitors and I think the tourists were wearing out their welcome. I doubt tourism itself will collapse though and it will just fall back to levels manageable by the Icelandic people
 
mjoelnir
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 9:35 am

I would rather talk about how well the Icelandic economy is taking the demise of WOW. WOW was a big company for a small country like Iceland.

- Our unemployment is at 3.7% with all the people having lost their job at WOW and not found work yet already registered.
- The central bank still runs a 4% discount rate, being more afraid of inflation than downturn.
- Yes our economy, having been the fastes growing in the western world for the last 4 years is expected to slow this year. Tourism being a bigger part than the demise of WOW itself. The slowdown in tourism was expected independent of WOW. The slowdown in air traffic hits mainly connecting passengers, rather than O&D.
- We have still influx of workers from EU countries, rather than people leaving. A lot of the workers having lost jobs at KEF because of WOW were foreigners.

I do not dispute the numbers in The Bloomberg article, I just think that both the title of this thread and the title of the article are overdrawn click bait. The Icelandic economy is far from crashing or being walloped, but chucking on at a lower acceleration.
 
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Aesma
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 9:45 am

The other day I saw on the evening news a bit about a place in Iceland having to be closed off because tourists were too numerous coming there, risking damage. Why were they coming there ? Justin Bieber had filmed a video in some pond...
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 11:17 am

musman9853 wrote:
flyoregon wrote:
SRQKEF wrote:
While I usually try to stay away from expletives, this article is quite plainly bullsh**. The Icelandic economy is slowing done for sure, but saying it's a) crashing and b) it's due to WOW is laughable. The tourism industry merely slowing down towards the right size with sustainable fares.

Plus, it's mainly the number of transfer pax that has plummeted. O&D pax were less than 10% down in April, and while they might go further down this summer due to S18 being WOW's largest operating period, it's still mostly transfer pax that were lost with the loss of WOW. The type of LCC pax that would've only travelled here on WOW are budget travellers that wouldn't have spent too much money towards the Icelandic economy anyway.


I don’t think it’s just the Icelandic economy slowing down. In Oregon, the economy is slowing down at a recognizable rate. I’d hardly say it’s near collapsing though. Just a mellow throttle back.



Yeah the bond yeild curve inverted a few months ago. Usually a good indicator of an imminent recession.

As for the article, I personally don't think wow's collapse was the sole reason Iceland's economy took a hit but it certainly doesn't help.

The yield curve is not inverted. Long rates are higher than short rates. It’s more U-shaped at the moment. With long still being higher than short.

Capacity to Iceland is down 25% from last year. There was a tourism bubble driven by artificially low fares that were not sustainable. In the meantime all sorts of tourism infrastructure was built based on unsustainable levels of traffic. When that bubble burts, it reverberates through the economy. I don’t know why so many posters are dismissing Wow’s impact on Iceland’s economy. Pointing out the world economy is slowing is not a valid argument. What is happening in Iceland is many times greater in magnitude than what is happening globally. If WOW isn’t the reason for any economic contraction in Iceland, than what is?
 
IWMBH
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 11:50 am

ewt340 wrote:
I guess it's for Icelandair to do the dirty job now.


The dirty job? You mean to do the thing the company was started for, flying customers?
 
mjoelnir
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 11:59 am

Bobloblaw wrote:
musman9853 wrote:
flyoregon wrote:

I don’t think it’s just the Icelandic economy slowing down. In Oregon, the economy is slowing down at a recognizable rate. I’d hardly say it’s near collapsing though. Just a mellow throttle back.



Yeah the bond yeild curve inverted a few months ago. Usually a good indicator of an imminent recession.

As for the article, I personally don't think wow's collapse was the sole reason Iceland's economy took a hit but it certainly doesn't help.

The yield curve is not inverted. Long rates are higher than short rates. It’s more U-shaped at the moment. With long still being higher than short.

Capacity to Iceland is down 25% from last year. There was a tourism bubble driven by artificially low fares that were not sustainable. In the meantime all sorts of tourism infrastructure was built based on unsustainable levels of traffic. When that bubble burts, it reverberates through the economy. I don’t know why so many posters are dismissing Wow’s impact on Iceland’s economy. Pointing out the world economy is slowing is not a valid argument. What is happening in Iceland is many times greater in magnitude than what is happening globally. If WOW isn’t the reason for any economic contraction in Iceland, than what is?


Capacity to Iceland is not down that much if we look at O&D, capacity via Iceland is what is reduced.

Most of the Icelandic numbers regarding the economy are still that good, that other countries would be proud of them. The most effected industry, apart from air transport are banks, not a great concern to me as long as they still make a profit, even if it is a reduced one.

We should also look at, that the debts of the Icelandic state are down to one of the lowest levels in the western world at 27% of the GDP. That the government takes more money in than it spends. That the central bank is a long way from pushing the economy through low rates.
If we are looking at the main industries in Iceland, as there are fishing and fish processing, aluminium production and so on, they are doing very well. The main problems of those industries are shortage of staff. Salaries and worker compensation are rising.

So talking about the Icelandic economy would be crashing or being walloped are far of the mark. Perhaps some Bankers looking at lower bonuses this year are gone into depression.
 
WorldFlier
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 12:13 pm

traindoc wrote:
Iceland is an interesting place to visit, in that the air fares are cheap, but everything else is expensive once you get on the ground there. Also, many people there are unhappy with the tourism boom because of the huge crowds of tourists. As they say, be careful what you wish for!


I would hate money too.

I mean Paris and New York the most visited cities in the world and the people that live there really dislike the money (tourists) coming to their cities.
 
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enilria
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 12:49 pm

Blimpie wrote:
Yeah, I saw this come over my desk and rolled my eyes. I don't have any does what Bloomberg does anymore. Iceland's stock in the tourist industry has been projected to dry up long before WOW ceased operation. I recall penning an article two years ago on the tourism departments projected figures for a reduction in tourism revenue, and these numbers seem to be par for the course.

While, I'm sure WOW's failure may have had some impact on on tourism, I really think this article is overstating WOW's collapse as a factor. Iceland's tourism has been a bubble for a few years now, and a large portion of the growth in tourism they have seen were the results of Icelandair's aggressive marketing and stay-over options.

I really have to wonder what some of the other newsrooms are doing anymore. It really feels like the inmates are running the asylum some days. Now, if you don't mind me, some numpty intern has sent me his Angry Birds fanfic instead of an article on Fiji.

I disagree with all of that except the decline of journalism. 100% agree there.

You have to have seats to have visitors. Fewer seats, fewer visitors. The math is simple. Also, Icelandair was adding seats to defend against WOW. That also has stopped coupled with the MAX parking.

As long as the low fares were there the market would have kept growing. Look at Dubai. It's 115F there in the Summer, at best, and it keeps growing and growing and growing. If you look at all the markets that gained WOW service, Iceland jumped to one of their top markets. If that had continued, so would the tourism expansion. Another factor people forget is that WOW and to a lesser extent Icelandair were extremely liberal on stopover pricing compared to the rest of the industry (sans-Emirates). If you were on a tourist bus A LOT of passengers would say "I had a 20 hour connect to get a good fare to Europe/USA, so I added a couple of nights here and they didn't charge extra". That was never going to stop and was simply a function of pricing and airline scheduling. Iceland was drawing from all of Europe to the USA as a stopover.

klm617 wrote:
I am sorry but allowing WOW Air to collapse was not in anyone's best interest except Icelandair. Sorry that's a fact toursism and jobs in Iceland suffer when you take away almost 50% of the capacity why is that so hard to understand. WOW Air provided a product that was beneficial to many and I stand with WOW Air and what they intended to do.

I think I have mixed feelings about that. So, yes they could have done like many foreign countries have done and subsidized a national carrier because the losses at an airline are dwarfed by the economic impact on an overall economy. If you take that off the table as an option, WOW was not financially sustainable. The network was fine, the problem was that the yield necessary for a market the size of Iceland to support two airlines wasn't there, particularly in the Winter when you need to basically give the seats away. So, there was a market at a price that to the overall economy was beneficial, but which could not allow WOW to obtain a profit as a component of that system. Arguably, it's a business study on how subsidies could create an economic impact multiplier. This is what China is doing to a massive extent with the 3rd tier Chinese long-haul air markets and giant subsidies.

More or less the whole situation is a great justification for China or Qatar and what they have done/are doing.
 
slcdeltarumd11
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 1:23 pm

I agree Iceland was running way over capacity. Both at the airport and the city.

The others levels were unsustainable without major infrastructure improvements i dont see them taking for seasonal tourists.
 
SCQ83
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 4:32 pm

IMO Icelandair losing WOW was the best that could happen to KEF.

The boom was clearly unsustainable. A place like Iceland did did not need two carriers (Icelandair and WOW) doing the same business. Now Icelandair is in a more secure position.

In those 10 years after the 2008 crash, Iceland has been able to attract (and so far to retain) many new foreign carriers: Air Canada, American, Austrian, British, Delta, EasyJet, Finnair, Iberia, Norwegian, Transavia, United or Wizz Air. All those new carriers help connecting the world to Iceland and contributing to the Icelandic tourism industry.
 
Heinkel
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 4:55 pm

slcdeltarumd11 wrote:
I agree Iceland was running way over capacity. Both at the airport and the city.

The others levels were unsustainable without major infrastructure improvements i dont see them taking for seasonal tourists.


Always remember, how big - or better small - Iceland is. The complete island has just 350.000 inhabitants.That's all.

Disneyland Resort has rough 18 million visitors per year...
 
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PatrickZ80
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 5:25 pm

FlyingElvii wrote:
Low airfares drive increased tourism. And when the low fares go away, so do the tourists driving the economy. Whodathunkit….
http://www.msn.com/en-us/money/companie ... ocid=ientp


The low fares didn't go away, LCCs like EasyJet and Wizzair are still serving Iceland as they did before. After the collapse of WOW Air, Transavia was in a rush to take over the Amsterdam - Keflavik route offering even lower fares than WOW Air did when they were still alive.

Of course from the American end of the line it would be a different story since WOW Air was the only LCC between Iceland and America, but the market between Europe and Iceland is still saturated with LCCs. Plenty of people are still visiting Iceland, only they fly a different airline now.

Lapplander800 wrote:
What has Icelandair got to do with WOW's collapse?


It means less competition, which is good for Icelandair.

canyonblue17 wrote:
I don't understand why people think Iceland is SOOOO expensive. I've been there. Stayed at two 3/4 star hotels and paid under $189/night. Rented a mid-sized car for a week (including extra insurance) and paid less than $300.


Sorry, but I honestly find that very expensive. Well, the car rental is not that bad (could still be cheaper) but a hotel for $189 a night? I think the maximum I've ever paid for a hotel anywhere in the world was € 70 a night, mostly a lot cheaper. In Italy I've stayed in a good hotel for € 20 a night. So yes, Iceland is expensive.
 
klm617
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 5:34 pm

SCQ83 wrote:
IMO Icelandair losing WOW was the best that could happen to KEF.

The boom was clearly unsustainable. A place like Iceland did did not need two carriers (Icelandair and WOW) doing the same business. Now Icelandair is in a more secure position.

In those 10 years after the 2008 crash, Iceland has been able to attract (and so far to retain) many new foreign carriers: Air Canada, American, Austrian, British, Delta, EasyJet, Finnair, Iberia, Norwegian, Transavia, United or Wizz Air. All those new carriers help connecting the world to Iceland and contributing to the Icelandic tourism industry.


Again the only benefactor of the WOW Air collapse was Icelandair.

The employees lost
The customer lost
and the economy of Iceland lost.

But hey as long as the countries beloved Icelandair survived who cares about all the losers in the WOW Air collapse. It was a carefully orchestrated plan to eliminate the competition and proof of that was the rise in air fares the day after WOW Air went out of business.
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...
 
Bricktop
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 5:39 pm

WorldFlier wrote:
traindoc wrote:
Iceland is an interesting place to visit, in that the air fares are cheap, but everything else is expensive once you get on the ground there. Also, many people there are unhappy with the tourism boom because of the huge crowds of tourists. As they say, be careful what you wish for!


I would hate money too.

I mean Paris and New York the most visited cities in the world and the people that live there really dislike the money (tourists) coming to their cities.

I can't speak for Paris (and probably shouldn't for NY), but most New Yorkers don't notice tourists, unless they are in the way of their walk to the subway. I'm sure most residents of highly visited places hate the tourists but love their money.
 
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SRQKEF
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 5:50 pm

klm617 wrote:
SCQ83 wrote:
IMO Icelandair losing WOW was the best that could happen to KEF.

The boom was clearly unsustainable. A place like Iceland did did not need two carriers (Icelandair and WOW) doing the same business. Now Icelandair is in a more secure position.

In those 10 years after the 2008 crash, Iceland has been able to attract (and so far to retain) many new foreign carriers: Air Canada, American, Austrian, British, Delta, EasyJet, Finnair, Iberia, Norwegian, Transavia, United or Wizz Air. All those new carriers help connecting the world to Iceland and contributing to the Icelandic tourism industry.


Again the only benefactor of the WOW Air collapse was Icelandair.

The employees lost
The customer lost
and the economy of Iceland lost.

But hey as long as the countries beloved Icelandair survived who cares about all the losers in the WOW Air collapse. It was a carefully orchestrated plan to eliminate the competition and proof of that was the rise in air fares the day after WOW Air went out of business.


Um, no. Just no.

Has it ever occurred to you that FI's fares were low because they faced unsustainable competition, as in WOW? So their fares rising after WOW's fall wasn't the completion of some evil conspiracy plan but simple economics where they could finally breath and stop selling tickets at a loss? Just a thought, I'm sure your opinion won't change though... :sarcastic:

In the long run, the economy of Iceland will be fine. Companies that are built on sand, growing way too fast with unsustainable business practices caused enough harm in 2008. No need to let WOW air repeat all those same mistakes, much better to build up the tourism industry at a reasonable and realistic rate.

Hopefully FI will add Detroit to it's network sooner rather than later. Let's see if you still say they're the big bad boy in town then... ;)
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klm617
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 6:11 pm

SRQKEF wrote:
klm617 wrote:
SCQ83 wrote:
IMO Icelandair losing WOW was the best that could happen to KEF.

The boom was clearly unsustainable. A place like Iceland did did not need two carriers (Icelandair and WOW) doing the same business. Now Icelandair is in a more secure position.

In those 10 years after the 2008 crash, Iceland has been able to attract (and so far to retain) many new foreign carriers: Air Canada, American, Austrian, British, Delta, EasyJet, Finnair, Iberia, Norwegian, Transavia, United or Wizz Air. All those new carriers help connecting the world to Iceland and contributing to the Icelandic tourism industry.


Again the only benefactor of the WOW Air collapse was Icelandair.

The employees lost
The customer lost
and the economy of Iceland lost.

But hey as long as the countries beloved Icelandair survived who cares about all the losers in the WOW Air collapse. It was a carefully orchestrated plan to eliminate the competition and proof of that was the rise in air fares the day after WOW Air went out of business.


Um, no. Just no.

Has it ever occurred to you that FI's fares were low because they faced unsustainable competition, as in WOW? So their fares rising after WOW's fall wasn't the completion of some evil conspiracy plan but simple economics where they could finally breath and stop selling tickets at a loss? Just a thought, I'm sure your opinion won't change though... :sarcastic:

In the long run, the economy of Iceland will be fine. Companies that are built on sand, growing way too fast with unsustainable business practices caused enough harm in 2008. No need to let WOW air repeat all those same mistakes, much better to build up the tourism industry at a reasonable and realistic rate.

Hopefully FI will add Detroit to it's network sooner rather than later. Let's see if you still say they're the big bad boy in town then... ;)


No one forced Icelandair to match WOW Air pricing and why would they if they were losing money. It would have been better to fly with a lower load factor than then to charge rock bottom fares. DL, AA and UA didn't dump low fare seats into the market to match WOW Air. Again the only agenda here was to eliminate the competition nothing else and that goal was achieve at the expense of many because in business the end always justifies the means now doesn't..
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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PatrickZ80
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 6:25 pm

klm617 wrote:
No one forced Icelandair to match WOW Air pricing and why would they if they were losing money. It would have been better to fly with a lower load factor than then to charge rock bottom fares. DL, AA and UA didn't dump low fare seats into the market to match WOW Air. Again the only agenda here was to eliminate the competition nothing else and that goal was achieve at the expense of many because in business the end always justifies the means now doesn't..


Clearly you don't understand how the market works.

Icelandair was making a loss because of WOW Air, that's for sure. You say they should accept lower load factors while keeping their fares up, but I can guarantee you if they did that their losses would be even bigger than they already were. Empty seats don't make money, they need high load factors to somewhat reduce the losses.

The American carriers didn't dump fares on their Icelandic routes because they were in a different position. They have coverage of just about every piece of land in the whole USA, so for anyone who doesn't live in one of the Icelandair or WOW Air destinations they were the only options. Therefor they could afford to charge higher fares. Same goes more or less for the European legacies that serve Keflavik. Plenty of spots from where they're the only option to Iceland.

That wasn't the case with Icelandair and WOW Air, who shared the same hub and for both airlines this was their only hub. That makes they're in the same position and after the same markets.
 
klm617
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 6:52 pm

PatrickZ80 wrote:
klm617 wrote:
No one forced Icelandair to match WOW Air pricing and why would they if they were losing money. It would have been better to fly with a lower load factor than then to charge rock bottom fares. DL, AA and UA didn't dump low fare seats into the market to match WOW Air. Again the only agenda here was to eliminate the competition nothing else and that goal was achieve at the expense of many because in business the end always justifies the means now doesn't..


Clearly you don't understand how the market works.

Icelandair was making a loss because of WOW Air, that's for sure. You say they should accept lower load factors while keeping their fares up, but I can guarantee you if they did that their losses would be even bigger than they already were. Empty seats don't make money, they need high load factors to somewhat reduce the losses.

The American carriers didn't dump fares on their Icelandic routes because they were in a different position. They have coverage of just about every piece of land in the whole USA, so for anyone who doesn't live in one of the Icelandair or WOW Air destinations they were the only options. Therefor they could afford to charge higher fares. Same goes more or less for the European legacies that serve Keflavik. Plenty of spots from where they're the only option to Iceland.

That wasn't the case with Icelandair and WOW Air, who shared the same hub and for both airlines this was their only hub. That makes they're in the same position and after the same markets.


That thinking is flawed because when WOW Air was in the Detroit market any city that they served no one matched their low fares. So when WOW Air sold their faces from DTW to continental Europe neither Delta of Lufthansa matches those fares no one forced FI to lower their fares they could have did what the other legacies did and maintain their fare levels WOW Air only had so much capacity. Icelandair's loss was due to poor management decisions.
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...
 
B747forever
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 7:09 pm

klm617 wrote:
PatrickZ80 wrote:
klm617 wrote:
No one forced Icelandair to match WOW Air pricing and why would they if they were losing money. It would have been better to fly with a lower load factor than then to charge rock bottom fares. DL, AA and UA didn't dump low fare seats into the market to match WOW Air. Again the only agenda here was to eliminate the competition nothing else and that goal was achieve at the expense of many because in business the end always justifies the means now doesn't..


Clearly you don't understand how the market works.

Icelandair was making a loss because of WOW Air, that's for sure. You say they should accept lower load factors while keeping their fares up, but I can guarantee you if they did that their losses would be even bigger than they already were. Empty seats don't make money, they need high load factors to somewhat reduce the losses.

The American carriers didn't dump fares on their Icelandic routes because they were in a different position. They have coverage of just about every piece of land in the whole USA, so for anyone who doesn't live in one of the Icelandair or WOW Air destinations they were the only options. Therefor they could afford to charge higher fares. Same goes more or less for the European legacies that serve Keflavik. Plenty of spots from where they're the only option to Iceland.

That wasn't the case with Icelandair and WOW Air, who shared the same hub and for both airlines this was their only hub. That makes they're in the same position and after the same markets.


That thinking is flawed because when WOW Air was in the Detroit market any city that they served no one matched their low fares. So when WOW Air sold their faces from DTW to continental Europe neither Delta of Lufthansa matches those fares no one forced FI to lower their fares they could have did what the other legacies did and maintain their fare levels WOW Air only had so much capacity. Icelandair's loss was due to poor management decisions.


Yet again you don’t seem to understand why FI had to match WOW’s fares. FI and WW were direct competitors in every market they flew, Iceland-US, Iceland-EU and US-EU. FI could not afford to lose pax by charging higher fares when they did not serve any unique markets. The carriers you have mentioned, AA, DL and LH did not have to match those low fares because it is a tiny percentage of all markets they serve that WW was directly competing in, and thus could afford to lose those pax as their other markets would make up for the losses there.
Work Hard, Fly Right
 
SCQ83
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 7:15 pm

klm617 wrote:
Again the only benefactor of the WOW Air collapse was Icelandair.

The employees lost
The customer lost
and the economy of Iceland lost.

But hey as long as the countries beloved Icelandair survived who cares about all the losers in the WOW Air collapse. It was a carefully orchestrated plan to eliminate the competition and proof of that was the rise in air fares the day after WOW Air went out of business.


I disagree. WOW helped tremendously to make Icelandair a global destination, specially in the US with those famous $99 fares. No doubt that the US3 (at least AA and UA which are the two late arrivals) launched flights to KEF because it was a "hot" market... and the market was boiling in the first place because of Icelandair and WOW.
 
PSAatSAN4Ever
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 7:29 pm

Bloomberg is a vulture-capitalist loving magazine that believes if there aren't massive profits flowing in, then the sky is falling.

WOW Air was never sustainable, period. It was attempting to be the FlyDubai of the Atlantic, with expansion the ever-driving force in its eventual global take-over.

Yeah, no. It was a novelty act that tried, but in the end, its business model was unsustainable. The market is simply right-sizing itself.

And for those who found Iceland "affordable", you must have brought your own food, because the vast majority of fresh food must be imported - and that ain't cheap!
 
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PatrickZ80
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 7:41 pm

Bricktop wrote:
I can't speak for Paris (and probably shouldn't for NY), but most New Yorkers don't notice tourists, unless they are in the way of their walk to the subway. I'm sure most residents of highly visited places hate the tourists but love their money.


Paris and New York might be the most visited cities in the world, but since they also have a lot of locals the percentage of tourists is actually not that high. That's very different in Reykjavik, which honestly is just a small city. Therefor, even with lower absolute numbers of tourists, the percentage of tourists in Reykjavik are likely far higher than in Paris or New York.

For a good view of tourism you should always offset the number of tourists to the number of locals.
 
Bricktop
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 8:45 pm

PatrickZ80 wrote:
Bricktop wrote:
I can't speak for Paris (and probably shouldn't for NY), but most New Yorkers don't notice tourists, unless they are in the way of their walk to the subway. I'm sure most residents of highly visited places hate the tourists but love their money.


Paris and New York might be the most visited cities in the world, but since they also have a lot of locals the percentage of tourists is actually not that high. That's very different in Reykjavik, which honestly is just a small city. Therefor, even with lower absolute numbers of tourists, the percentage of tourists in Reykjavik are likely far higher than in Paris or New York.

For a good view of tourism you should always offset the number of tourists to the number of locals.

Quite correct.
 
aamd11
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 8:54 pm

klm617 wrote:
aamd11 wrote:
klm617 wrote:
I am sorry but allowing WOW Air to collapse was not in anyone's best interest except Icelandair. Sorry that's a fact toursism and jobs in Iceland suffer when you take away almost 50% of the capacity why is that so hard to understand. WOW Air provided a product that was beneficial to many and I stand with WOW Air and what they intended to do.

Allowing WOW to collapse is what the market demanded. Potential investors looked over the books, looked over them twice and all walked away. The business was obviously far from sustainable, so who should foot the bill to keep it going? Would the Icelandic government want to splash the cash on an unviable business venture just to keep tourism numbers up? Particularly when you consider that the tourism boom Iceland has enjoyed could put enormous strain on the country's infrastructure? That's throwing good money after bad.

This is a country of 340,000 people.
Almost 2,200,000 visitors made an overnight stay in Iceland in 2017.


Icelandair was more than happy to let them fold. The business plan going forward was potentially sustainable it's just the rate at which they expanded that cost them. With the network they operated at the end the likely hood of them succeeding was pretty good it's just that Icelandair wanted them out of the way. The jobs that it created was good for Iceland on all levels and we are now seeing the fallout from that. Even the government of Iceland urged Icelandair into talks to save WOW that's how important it was to the economy of Iceland.

Your argument here appears to be that WOW was potentially sustainable... If only the growth hadn't been so... Unsustainable.

There's no doubting that's a valid point - the unsustainable growth is what did a lot of damage to the future viability of the business. We know that the growth was unsustainable, and the business was unsustainable because the business collapsed.

I'm skeptical as to whether the collapse has been harmful to the Icelandic economy overall. It remains to be seen whether there's more than a short term impact. Keeping in mind the phenomenal growth in the Icelandic tourism scene in the last five years - not all of it down to WOW.
 
Lapplander800
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 10:48 pm

klm617 wrote:
But hey as long as the countries beloved Icelandair survived who cares about all the losers in the WOW Air collapse. It was a carefully orchestrated plan to eliminate the competition and proof of that was the rise in air fares the day after WOW Air went out of business.


Was it a conspiracy?
Who else was involved other than Icelandair? Lufthansa perhaps?

BTW: when planes suddenly fill up to rescue stranded travelers due to an instant reduction in supply it is quite normal that the saver fares go quite quickly. The fare buckets that sell last are more expensive. There is nothing new there.
 
Lapplander800
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 11:05 pm

B747forever wrote:
klm617 wrote:
PatrickZ80 wrote:

Clearly you don't understand how the market works.

Icelandair was making a loss because of WOW Air, that's for sure. You say they should accept lower load factors while keeping their fares up, but I can guarantee you if they did that their losses would be even bigger than they already were. Empty seats don't make money, they need high load factors to somewhat reduce the losses.

The American carriers didn't dump fares on their Icelandic routes because they were in a different position. They have coverage of just about every piece of land in the whole USA, so for anyone who doesn't live in one of the Icelandair or WOW Air destinations they were the only options. Therefor they could afford to charge higher fares. Same goes more or less for the European legacies that serve Keflavik. Plenty of spots from where they're the only option to Iceland.

That wasn't the case with Icelandair and WOW Air, who shared the same hub and for both airlines this was their only hub. That makes they're in the same position and after the same markets.


That thinking is flawed because when WOW Air was in the Detroit market any city that they served no one matched their low fares. So when WOW Air sold their faces from DTW to continental Europe neither Delta of Lufthansa matches those fares no one forced FI to lower their fares they could have did what the other legacies did and maintain their fare levels WOW Air only had so much capacity. Icelandair's loss was due to poor management decisions.


Yet again you don’t seem to understand why FI had to match WOW’s fares. FI and WW were direct competitors in every market they flew, Iceland-US, Iceland-EU and US-EU. FI could not afford to lose pax by charging higher fares when they did not serve any unique markets. The carriers you have mentioned, AA, DL and LH did not have to match those low fares because it is a tiny percentage of all markets they serve that WW was directly competing in, and thus could afford to lose those pax as their other markets would make up for the losses there.


AA, DL, UA, LH and BA all have their own customer bases, networks and frequent flyers. All of which expands the market.

Just as the destination can sell itself and the airline becomes a way to a means to get there (andy you fly EasyJet or Wow), the airline can also sell the destination to their captive customers as well.

I have found these legacies to be consistently the most expensive option when checking. Both BA and LH have stated that a bulk of their Iceland flyers are connecting on their own flights from Asia. One can assume the same with AY.
 
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SRQKEF
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 11:31 pm

Lapplander800 wrote:
B747forever wrote:
klm617 wrote:

That thinking is flawed because when WOW Air was in the Detroit market any city that they served no one matched their low fares. So when WOW Air sold their faces from DTW to continental Europe neither Delta of Lufthansa matches those fares no one forced FI to lower their fares they could have did what the other legacies did and maintain their fare levels WOW Air only had so much capacity. Icelandair's loss was due to poor management decisions.


Yet again you don’t seem to understand why FI had to match WOW’s fares. FI and WW were direct competitors in every market they flew, Iceland-US, Iceland-EU and US-EU. FI could not afford to lose pax by charging higher fares when they did not serve any unique markets. The carriers you have mentioned, AA, DL and LH did not have to match those low fares because it is a tiny percentage of all markets they serve that WW was directly competing in, and thus could afford to lose those pax as their other markets would make up for the losses there.


AA, DL, UA, LH and BA all have their own customer bases, networks and frequent flyers. All of which expands the market.

Just as the destination can sell itself and the airline becomes a way to a means to get there (andy you fly EasyJet or Wow), the airline can also sell the destination to their captive customers as well.

I have found these legacies to be consistently the most expensive option when checking. Both BA and LH have stated that a bulk of their Iceland flyers are connecting on their own flights from Asia. One can assume the same with AY.


I've flown KEF-HEL on the AY A321 twice, both times full to the brim, and I swear the cabin looked like I was flying from Beijing to Tokyo. Add the fact AY codeshares on the 2x daily FI 757s to HEL as well and it becomes apparent they're connecting tons of pax from/to Asia to/from Iceland.
Nothing compares to taking off in an empty 757 with full thrust!
 
klm617
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Thu May 23, 2019 11:41 pm

Lapplander800 wrote:
klm617 wrote:
But hey as long as the countries beloved Icelandair survived who cares about all the losers in the WOW Air collapse. It was a carefully orchestrated plan to eliminate the competition and proof of that was the rise in air fares the day after WOW Air went out of business.


Was it a conspiracy?
Who else was involved other than Icelandair? Lufthansa perhaps?

BTW: when planes suddenly fill up to rescue stranded travelers due to an instant reduction in supply it is quite normal that the saver fares go quite quickly. The fare buckets that sell last are more expensive. There is nothing new there.


Icelandair dragged out the talks as WOW Air continued to fonder until nothing was left. If Icelandair would have made good on their deal to take them over when they first sated their intent to take them over there would have been no losers and Icelandair would have looked like a knight in shining armor but instead they wasted valuable time allowing WOW Air to continue to bleed money. I am of the opinion that Icelandair wanted WOW Air out of the way and from the beginning had no intention of helping them. There were no rescue flights for passengers in Detroit or Baltimore and those market to this day are still unserved.
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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SRQKEF
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Fri May 24, 2019 1:28 am

klm617 wrote:
Lapplander800 wrote:
klm617 wrote:
But hey as long as the countries beloved Icelandair survived who cares about all the losers in the WOW Air collapse. It was a carefully orchestrated plan to eliminate the competition and proof of that was the rise in air fares the day after WOW Air went out of business.


Was it a conspiracy?
Who else was involved other than Icelandair? Lufthansa perhaps?

BTW: when planes suddenly fill up to rescue stranded travelers due to an instant reduction in supply it is quite normal that the saver fares go quite quickly. The fare buckets that sell last are more expensive. There is nothing new there.


Icelandair dragged out the talks as WOW Air continued to fonder until nothing was left. If Icelandair would have made good on their deal to take them over when they first sated their intent to take them over there would have been no losers and Icelandair would have looked like a knight in shining armor but instead they wasted valuable time allowing WOW Air to continue to bleed money. I am of the opinion that Icelandair wanted WOW Air out of the way and from the beginning had no intention of helping them. There were no rescue flights for passengers in Detroit or Baltimore and those market to this day are still unserved.


WOW would've "fondered until nothing was left" anyway as no one else was interested in investing, and besides FI was very quick to act both times WOW approached them. And yes, telling you this for the bazillionth time I feel like, FI didn't state their intent as much as WOW came begging to them on their knees. Unfortunately, their huge debt was just too much for FI to swallow. And as a private company, FI's duty to their shareholders quite obviously isn't to stupidly be a "knight in shining armour" for a mismanaged, debt-ridden airline. It's to make sound business decisions, and letting WOW be sadly was one.

I understand you might be suffering because WOW was the cheapest option to Europe from your home city, but for the love of God stop blaming FI for it. Icelandair didn't "allow" WOW to keep bleeding money, WOW's own management did with mismanagement and plainly losing sight of reality. They said they'd be bigger than SAS for God's sake, and exactly a year ago Skuli said that by now they'd have 12-15 Asian destinations. Look where that got them.
Nothing compares to taking off in an empty 757 with full thrust!
 
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PatrickZ80
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Fri May 24, 2019 6:12 am

klm617 wrote:
There were no rescue flights for passengers in Detroit or Baltimore and those market to this day are still unserved.


You mean no direct rescue flights, which is true. However there were one-stop rescue flights on the American carriers. For example you could have flown from Keflavik to Detroit through New York.

You say these markets are unserved, but that's incorrect. They are served, just not with a direct flight. That's true for 99% of America, so nothing new there. However for a good part of America it's possible to get to Keflavik one-stop on either American, Delta or United. This includes Detroit and Baltimore as well.
 
ewt340
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Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Fri May 24, 2019 6:34 am

IWMBH wrote:
ewt340 wrote:
I guess it's for Icelandair to do the dirty job now.


The dirty job? You mean to do the thing the company was started for, flying customers?


No, to get as much traffic to and from Iceland to help the economy regardless of the costs.

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