Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
F9Animal
Posts: 4419
Joined: Thu Dec 16, 2004 7:13 am

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Sat May 25, 2019 4:09 pm

How can a single airline that was only around for what seems like a rather short period bring down Icelands economy? That is like some news articles that said the collapse of National Airlines 2 based out if Vegas was going to crush the Vegas economy!! It didnt even make a blip on the economy in LAS.

Also, Iceland Air is still chugging along with some pretty darned good fares. The sky is not falling.
I Am A Different Animal!!
 
Lapplander800
Posts: 97
Joined: Sat Jun 30, 2018 4:56 pm

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Sat May 25, 2019 5:25 pm

hvusslax wrote:
kyrone wrote:
Is there still any talk of the former management team starting another airline? If I recall, right after the collapse, they planned to start this summer ( which was doubtful IMO )! Any news on the subject?


Everything went silent on those plans pretty soon and Skúli Mogensen has all but disappeared from the media.


I am sure aircraft leasing companies are waiting in a long line to supply him with new planes (or should I call it collateral?) at excellent rates.
 
User avatar
SRQKEF
Posts: 1948
Joined: Fri Jun 17, 2011 7:10 pm

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Sat May 25, 2019 7:34 pm

klm617 wrote:
LAXdude1023 wrote:
klm617 wrote:

That's not Capitalism my friend sorry that's dictatorship and price fixing of a different form. You can attaché any name you want to the way business is done today but that doesn't make it capitalism.


This is capitalism: "an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state."

This is a dictatorship: "government by a dictator."

THEY ARE LITERALLY THE OPPOSITE OF EACH OTHER. You cant have a capitalist dictatorship in any form. It doesnt exist.

In reading your post history, what you really seem to be advocating for is a full blown return to the days of regulation. Where the government controls what prices the airlines can charge and what routes they can fly. Here is what you dont get: they airlines dont own you or their competition jack squat. Why should FI have helped WOW? Corporations are not charities. WOW was poorly managed and suffered because of it. End of story. It was not FI's job to come in and rescue them.


Can we please put this corporations are not charities BS to rest. I don't call them criminals for manipulating and exploiting a captive market to maximize the amount of money they can milk out of them. No I do not believe the airline industry should be regulated by the government or the airlines themselves. There should be a happy medium where everyone benefits not a market where just one entity wins because of lack of competition. You're not old enough to remember when the market had the luxury of choice where if you did like what one competitor was doing you could chose another well in the airline world in the USA that's not the case because the market is void of competition. Now Icelander's are Faced with the same issue they have no choice it's basically for the most part Icelandair or nothing. I never said that Icelandair should own the debt of WOW Air what I said was that if they had no intent of stepping up they should have kept their nose out and let the chips fall where they may. And before you jump on that band wagon of there was too much competition before consolidation that's not true either it was bad management that ran most airlines into the ground and Southwest proves that point because while growing through the deregulation years they stilled turned a profit every year.


God, I can’t believe I have to tell you this yet again. I’ve given you literally dozens of links from reputable media companies to back up what I’m saying, but you just. Won’t. Listen.

Icelandair didn’t want to get involved with WOW, neither last March nor November 2018. It was WOW that came begging to them. In a sense, the “chips had already fallen where they may” at that point. WOW was beyond saving. Not because of Icelandair or anyone else but because of their own inept management. Period.

If you still blabber on with your insane theories on WOW’s downfall after this you’re beyond helping, so I won’t reply again.
Nothing compares to taking off in an empty 757 with full thrust!
 
KLDC10
Posts: 1409
Joined: Tue Jun 14, 2016 8:15 pm

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Sat May 25, 2019 10:16 pm

SRQKEF wrote:
God, I can’t believe I have to tell you this yet again. I’ve given you literally dozens of links from reputable media companies to back up what I’m saying, but you just. Won’t. Listen.

Icelandair didn’t want to get involved with WOW, neither last March nor November 2018. It was WOW that came begging to them. In a sense, the “chips had already fallen where they may” at that point. WOW was beyond saving. Not because of Icelandair or anyone else but because of their own inept management. Period.

If you still blabber on with your insane theories on WOW’s downfall after this you’re beyond helping, so I won’t reply again.


:checkmark: :checkmark: :checkmark:

The reason there is less competition in the Icelandic market now is because WOW was badly run. It wasn't necessarily doomed to fail from the start; it might have been reasonably successful had it been run better and not expanded so quickly and recklessly.

It is no surprise that Icelandair would not step in to save them.
DC9/MD90/MD11/F70/BAE146
737/738/739/744/748/752/763/772/789
A319/A320/A321/A332/A333/A346/A359
Q400/E170/E175/E190/CS300
 
LAXdude1023
Posts: 6164
Joined: Thu Sep 07, 2006 3:16 pm

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Sat May 25, 2019 11:57 pm

klm617 wrote:
LAXdude1023 wrote:
klm617 wrote:

That's not Capitalism my friend sorry that's dictatorship and price fixing of a different form. You can attaché any name you want to the way business is done today but that doesn't make it capitalism.


This is capitalism: "an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state."

This is a dictatorship: "government by a dictator."

THEY ARE LITERALLY THE OPPOSITE OF EACH OTHER. You cant have a capitalist dictatorship in any form. It doesnt exist.

In reading your post history, what you really seem to be advocating for is a full blown return to the days of regulation. Where the government controls what prices the airlines can charge and what routes they can fly. Here is what you dont get: they airlines dont own you or their competition jack squat. Why should FI have helped WOW? Corporations are not charities. WOW was poorly managed and suffered because of it. End of story. It was not FI's job to come in and rescue them.


Can we please put this corporations are not charities BS to rest. I don't call them criminals for manipulating and exploiting a captive market to maximize the amount of money they can milk out of them. No I do not believe the airline industry should be regulated by the government or the airlines themselves. There should be a happy medium where everyone benefits not a market where just one entity wins because of lack of competition. You're not old enough to remember when the market had the luxury of choice where if you did like what one competitor was doing you could chose another well in the airline world in the USA that's not the case because the market is void of competition. Now Icelander's are Faced with the same issue they have no choice it's basically for the most part Icelandair or nothing. I never said that Icelandair should own the debt of WOW Air what I said was that if they had no intent of stepping up they should have kept their nose out and let the chips fall where they may. And before you jump on that band wagon of there was too much competition before consolidation that's not true either it was bad management that ran most airlines into the ground and Southwest proves that point because while growing through the deregulation years they stilled turned a profit every year.


I dont know how old you think I am, but Ive worked in this industry since I graduated college in 2005. When I started it was AA, DL, UA, HP, US, CO, WN, NK, F9, and whatever Skybus was among others. I certainly am not too young to remember when "the market had the luxury of choice (which they do now too, but whatever). Guess what? Almost everyone of them was unprofitable. Comparing WN to an airline DL or UA shows pure and absolute ignorance. WN only flies one kind of plane, operates no longhaul flights doesnt have lounges, doesnt have agreements with other airlines (interlines, codeshares, baggage agreements, etc), and they operate their own GDS. Doing those things help keep the cost of operation low. Life is much more simple for WN and good for them.

Bringing it back to Iceland, why does a country where the entire population is less than 20% of your believed Wayne County need two airlines with extensive service??? More importantly than that, WHY DO YOU REFUSE TO ACKNOWLEDGE THAT WOW APPROACHED FI AND BEGGED FOR THEM TO BE TAKEN OVER AND NOT THE OTHER WAY AROUND???? SRQKEF knows more about the Icelandic market than either of us could hope to and he is correct on this one.

And yeah whether you realize it or not you are absolutely arguing for a return to regulation.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
User avatar
SRQKEF
Posts: 1948
Joined: Fri Jun 17, 2011 7:10 pm

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 29, 2019 12:45 am

Some new information in the Icelandic media today:

  • The editor of the business section of Morgunblaðið, one of the two major Icelandic newspapers, just published a book called WOW: Birth and Fall of an Airline. He did a press conference today where he listed off some previously unknown facts, all with reputable sources behind them.
  • It's his opinion, based on everything he's learned since the bankruptcy, that WOW was already beyond saving back in September. On the same note, he said that WOW had already approached Icelandair to rescue them at the end of August, before the bond issue in September. Multiple investors from that issue have gone on record that they had no knowledge of them approaching Icelandair at that time or the grave situation the airline was in at the time.
  • Original talks with Icelandair fell through when the management of FI told Skuli they felt it was their responsibility to their shareholders to inform the stock market of the negotiations. As the negotiations were based on WOW being on the brink of bankruptcy and the bond issue was around the corner, Skuli decided to pull out of the talks as he wanted to give one last try to save the airline with the bond issue and felt that FI going public with WOW's dire finances would stop any potential investors from looking at the airline. Talks then resurfaced and went public for the first time at the start of November when WOW had literally run out of cash.
  • While the bond issue was reported by the airline to have raised 50 million €, it has since emerged that only a small percentage of that was actual cash flow and it was mostly an exchange of short term debt towards long term debt by existing creditors. That included over 5 mio € from Skuli Mogensen himself. Multiple investors have also gone on record saying that had they known that was the case, they would've been hesitant to invest.
  • With some exceptions, almost all the money raised in that bond issue actually came from family and close friends of Skuli. Most investors outside of his circle reportedly didn't have any interest at all in any investments in the airline.
  • As is well known, WOW air racked up a 2.2 billion ISK (~2 mio USD) debt in landing fees with Isavia, despite Isavia's rules clearly stating that airlines can under no circumstances continue operating at airport under their jurisdiction with unpaid fees. This debt has resulted in Isavia grounding former WOW plane TF-GPA, owned by the leasing company ALC. ALC is reportedly considering suing Isavia for giving state aid to WOW air as it is a public company, thus going against European rules on state funding.
Nothing compares to taking off in an empty 757 with full thrust!
 
User avatar
SRQKEF
Posts: 1948
Joined: Fri Jun 17, 2011 7:10 pm

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 29, 2019 1:15 am

SRQKEF wrote:
Some new information in the Icelandic media today:

  • The editor of the business section of Morgunblaðið, one of the two major Icelandic newspapers, just published a book called WOW: Birth and Fall of an Airline. He did a press conference today where he listed off some previously unknown facts, all with reputable sources behind them.
  • It's his opinion, based on everything he's learned since the bankruptcy, that WOW was already beyond saving back in September. On the same note, he said that WOW had already approached Icelandair to rescue them at the end of August, before the bond issue in September. Multiple investors from that issue have gone on record that they had no knowledge of them approaching Icelandair at that time or the grave situation the airline was in at the time.
  • Original talks with Icelandair fell through when the management of FI told Skuli they felt it was their responsibility to their shareholders to inform the stock market of the negotiations. As the negotiations were based on WOW being on the brink of bankruptcy and the bond issue was around the corner, Skuli decided to pull out of the talks as he wanted to give one last try to save the airline with the bond issue and felt that FI going public with WOW's dire finances would stop any potential investors from looking at the airline. Talks then resurfaced and went public for the first time at the start of November when WOW had literally run out of cash.
  • While the bond issue was reported by the airline to have raised 50 million €, it has since emerged that only a small percentage of that was actual cash flow and it was mostly an exchange of short term debt towards long term debt by existing creditors. That included over 5 mio € from Skuli Mogensen himself. Multiple investors have also gone on record saying that had they known that was the case, they would've been hesitant to invest.
  • With some exceptions, almost all the money raised in that bond issue actually came from family and close friends of Skuli. Most investors outside of his circle reportedly didn't have any interest at all in any investments in the airline.
  • As is well known, WOW air racked up a 2.2 billion ISK (~2 mio USD) debt in landing fees with Isavia, despite Isavia's rules clearly stating that airlines can under no circumstances continue operating at airport under their jurisdiction with unpaid fees. This debt has resulted in Isavia grounding former WOW plane TF-GPA, owned by the leasing company ALC. ALC is reportedly considering suing Isavia for giving state aid to WOW air as it is a public company, thus going against European rules on state funding.


Just to add: https://icelandmonitor.mbl.is/news/news ... n_wow_air/

This is the only link I could find in English, however there are multiple reports on this all over Icelandic media today in Icelandic. Google Translate might be enough to give you the gist of it, here are some relevant links:

https://www.visir.is/g/2019190528859/se ... ember-2018
https://www.mbl.is/vidskipti/frettir/20 ... september/
https://www.mbl.is/vidskipti/frettir/20 ... di_um_wow/
Nothing compares to taking off in an empty 757 with full thrust!
 
arcticcruiser
Posts: 452
Joined: Tue Aug 22, 2017 2:16 pm

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 29, 2019 6:26 am

SRQKEF wrote:
Some new information in the Icelandic media today:

  • The editor of the business section of Morgunblaðið, one of the two major Icelandic newspapers, just published a book called WOW: Birth and Fall of an Airline. He did a press conference today...
  • As is well known, WOW air racked up a 2.2 billion ISK (~2 mio USD) debt in landing fees with Isavia, despite Isavia's rules clearly stating that airlines can under no circumstances continue operating at airport under their jurisdiction with unpaid fees. This debt has resulted in Isavia grounding former WOW plane TF-GPA, owned by the leasing company ALC. ALC is reportedly considering suing Isavia for giving state aid to WOW air as it is a public company, thus going against European rules on state funding.


More like 20M USD owed to KEF.
 
User avatar
Jouhou
Posts: 2539
Joined: Tue May 24, 2016 4:16 am

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 29, 2019 6:47 am

KLDC10 wrote:
SRQKEF wrote:
God, I can’t believe I have to tell you this yet again. I’ve given you literally dozens of links from reputable media companies to back up what I’m saying, but you just. Won’t. Listen.

Icelandair didn’t want to get involved with WOW, neither last March nor November 2018. It was WOW that came begging to them. In a sense, the “chips had already fallen where they may” at that point. WOW was beyond saving. Not because of Icelandair or anyone else but because of their own inept management. Period.

If you still blabber on with your insane theories on WOW’s downfall after this you’re beyond helping, so I won’t reply again.


:checkmark: :checkmark: :checkmark:

The reason there is less competition in the Icelandic market now is because WOW was badly run. It wasn't necessarily doomed to fail from the start; it might have been reasonably successful had it been run better and not expanded so quickly and recklessly.

It is no surprise that Icelandair would not step in to save them.


I thought rapid expansions like theirs is frequently used as a way to mask needing to fund existing operations with debt. If they can grow fast enough they can keep skimming money from lenders and investors intended to fund growth to keep an unprofitable operation going. We've seen that a lot in here haven't we?
情報
 
User avatar
SRQKEF
Posts: 1948
Joined: Fri Jun 17, 2011 7:10 pm

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 29, 2019 7:04 am

arcticcruiser wrote:
SRQKEF wrote:
Some new information in the Icelandic media today:

  • The editor of the business section of Morgunblaðið, one of the two major Icelandic newspapers, just published a book called WOW: Birth and Fall of an Airline. He did a press conference today...
  • As is well known, WOW air racked up a 2.2 billion ISK (~2 mio USD) debt in landing fees with Isavia, despite Isavia's rules clearly stating that airlines can under no circumstances continue operating at airport under their jurisdiction with unpaid fees. This debt has resulted in Isavia grounding former WOW plane TF-GPA, owned by the leasing company ALC. ALC is reportedly considering suing Isavia for giving state aid to WOW air as it is a public company, thus going against European rules on state funding.


More like 20M USD owed to KEF.


The zero got lost somewhere, oops! :oops:
Nothing compares to taking off in an empty 757 with full thrust!
 
hohd
Posts: 921
Joined: Sat May 17, 2008 1:03 am

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 29, 2019 1:45 pm

I have been researching Iceland for a visit and I don't find it very expensive either, one can find a 3 start hotel for 140 to 160 range and car rental for about 50 to 60 range per day. Food is up to the individual and can vary widely. Not everyone wants to eat in high priced restaurants every day.
 
luckyone
Posts: 3079
Joined: Thu Aug 21, 2008 1:50 pm

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 29, 2019 4:19 pm

hohd wrote:
I have been researching Iceland for a visit and I don't find it very expensive either, one can find a 3 start hotel for 140 to 160 range and car rental for about 50 to 60 range per day. Food is up to the individual and can vary widely. Not everyone wants to eat in high priced restaurants every day.

I just returned from Iceland. We had one reasonably priced meal $80-100 for five each day. Then went to grocery stores and bought meat, bread, cheese, and skyr. And fed five of us for less than $50 for four days.
 
ScottB
Posts: 6986
Joined: Fri Jul 28, 2000 1:25 am

Re: Bloomberg: Wow Air Collapse is Crashing the Icelandic Economy

Wed May 29, 2019 9:54 pm

Bricktop wrote:
13 airlines sounds great, but FI has >70% of the market. 10 times as many flights as its nearest "competitor" and all the rest are onesies and twosies.
Destinations where more than one airline serves are 7. CPH, FRA, HEL, LHR, MSP, JFK, and OSL, all served by FI and only one other.


Actually, that is pretty normal for a hub airport, especially one with a small local passenger base. AA has over 90% of the CLT market by departures. DL has 71% of departures at SLC. The entire nation of Iceland has about as many people as the metro areas of Rockford, IL or Lincoln, NE. Thanks in part to tourism and the FI hub, Iceland is incredibly lucky to have as much service as it gets at KEF.

klm617 wrote:
Now Icelander's are Faced with the same issue they have no choice it's basically for the most part Icelandair or nothing.


That's simply not true. Icelanders have a dozen other airlines they can choose. They might have to change planes somewhere or forgo loyalty miles, but it's not as if they would have been choosing WOW for miles anyway.

klm617 wrote:
When Icelandair announced the buyout they should have put their money where there mouth was right then and there. Two things either FI seen value in them or wanted to put them out of business to step up so boldly and announce a take over of their operations and with the end result we now see what their true intent was.


If those were the rules of buyouts in Iceland, FL would have never even considered the transaction. That'd be like paying full market price for a foreclosed house without having a chance to look inside and see if the house had been gutted/burned/used as a meth lab/etc. And the press release announcing the combination in early November was very clear that the transaction was subject to due diligence. Moreover, it was possible that the shareholders of WOW would have received zero compensation had the acquisition been completed; this was also disclosed initially.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos