WOW air

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WOW air
WOW air logo.svg
IATA ICAO Callsign
WW WOW WOW AIR
FoundedNovember 2011
Commenced operations31 May 2012
Ceased operations28 March 2019
HubsKeflavík International Airport
Fleet size10
Destinations27[1]
Key peopleSkúli Mogensen (CEO and founder)
Employees1,000[2]
Websitewowair.com

WOW air hf.[3] was an Icelandic ultra low-cost carrier operating between 2012 and 2019. The airline was headquartered in Reykjavík and based at Keflavík International Airport.[4] It flew between Iceland and the rest of Europe and North America, and also flew to India as part of a wider plan to expand in Asia.[3][5][1] It ceased operations on 28 March 2019.[6]

History[edit]

Wow air headquarters in Reykjavík

Early developments and expansion (2012-2016)[edit]

Iceland's geographic position has made it an attractive stopover point for flights across the Atlantic. In the 1960s, flag carrier Icelandair established a stopover program to encourage tourism that continues to this day.[7] Icelandic Airlines, also known as Loftleiðir and remembered by the nicknames "Hippie Airline" and "Hippie Express", also used this approach along with a number of expense-lowering measures to become one of the first low-cost transatlantic carriers before it merged to form Icelandair.[8][9] The collapse of the króna due to the Icelandic financial crisis in 2008 and the publicity brought by the 2010 eruption of Eyjafjallajökull to its natural features led to a significant rise in tourism there.[10]

WOW air was founded by Icelandic entrepreneur Skúli Mogensen, who previously had an extensive business background largely in technology and telecoms in Iceland, Europe, and North America. The sole owner of WOW air was Titan, an investment company owned by Mogensen,[11] who was the company CEO and sat on the five-person board of directors.[12][13] Mogensen cited a gap in the low-cost aviation market with regards to Iceland, and aimed to make it a major international transit point, repeatedly stating throughout that airline's history that he wanted Iceland to become "the Dubai of the north".[14][15][16] According to him, the airline's name was chosen to signify his feelings toward Iceland and also because it reads "MOM" when the letters are turned upside down. Booking was opened 24 November 2011, with the airline planning to serve 12 destinations in Europe upon its operational launch the next summer.[17]

The airline's first service, from Keflavík to Paris Charles de Gaulle, was flown on 31 May 2012.[18][19] In October 2012, WOW air acquired Iceland Express's operations and network.[20] Iceland Express operated to several destinations in Europe and North America using leased equipment. At the end of October 2012, following the acquisition of its operations, flights to Gatwick and Copenhagen saw frequency increases, services to Berlin, Kaunas (which was later dropped again), Salzburg and Warsaw had begun.

The airline carried over 400,000 passengers in 2013 and reached its one millionth passenger in December 2014.[19]

From 2015, WOW air started expanding into North America, serving first the U.S., then Canada starting in May 2016.[21][22] Flights to Los Angeles and San Francisco began in June 2016 using two Airbus A330-300 planes leased from Air Europa.[23] WOW air's annual passenger capacity more than doubled in 2016 to over 1.6 million,[24] from approximately 740,000 in 2015.[25]

Criticism of pricing claims[edit]

In 2017, Wow Air was accused of spreading false claims through churnalism, after several media outlets reported its claim that it would fly passengers from London Stansted to New York for £99, which it said was below cost. A flight leg priced at £99 was only available as part of a significantly more expensive return flight.[26]

Peak, financial difficulties and takeover talks (2017-2018)[edit]

Despite a 58% increase in revenue from the past year, WOW air experienced a loss in 2017 after two profitable years. Although a contemporary analysis from the Aviation Week Network pinned the results on overexpansion, the airline didn't relent, reaching a high of 36 destinations in its network by 2018. Third quarter results that year showed a similar pattern, with increased revenues being counteracted by a larger loss margin. These issues were compunded with an increasing reputation for poor customer service.[27][28] On 5 November 2018, it was announced that Icelandair Group, the holding company of rival carrier Icelandair, would acquire the entire share capital of WOW air, subject to shareholder approval; the two airlines would continue to operate under separate names. Together, Icelandair and WOW air have a share of around 3.8% of the transatlantic market.[29][30] On 27 November 2018, WOW air announced that it had returned four aircraft to their lessors as a sale and lease back offer fell through and the company's financial situation worsened due to stricter demands by suppliers and contractors.[31][32] The four returned aircraft (two Airbus A320s and two A330s) are owned by the same company that was supposed to deliver four Airbus A330neos to WOW air.[33] On 29 November, Icelandair abandoned its takeover plans as the pre-conditions of the shareholders meeting were unlikely to be met.[34]

The same day, Indigo Partners, which has stakes in several ultra low-cost carriers, reached a preliminary agreement to buy WOW air.[35] Shortly after, WOW air announced major adjustments to its operations: the staff was reduced by 360 down to about 1,000, a further five aircraft (four Airbus A321s and the remaining A330) were to be phased out and the A330neos ordered would be cancelled.[2][36] WOW air thus ended its routes to Delhi, Los Angeles, San Francisco (which was seasonal) and Vancouver (which was to be introduced as a seasonal route in 2019).[37] In January 2019, WOW air disclosed that Indigo's investment would initially correspond to a 49% shareholding, with the option to increase at a later date.[38] However, by March 2019, Indigo Partners withdrew its investment proposal[39] and WOW air briefly but unsuccessfully resumed talks with Icelandair Group, but after Icelandair examined WOW's finances, they quickly dismissed the proposals.[40] On 25 March 2019, the day after talks with Icelandair ceased, several WOW air flights were cancelled, fueling speculation as to the airline's fate.[41] The airline attributed the cancellations to a technical failure and its knock-on effects,[42] although two planes were immobilised after being repossessed by the lessor.[43]

On 26 March 2019, WOW air announced the conversion of bonds into equity and ongoing discussions with bondholders to secure the company's sustainability.[44] The following day, the company postponed all flights scheduled for 28 March "until documentation with all parties involved have been finalised."[45]

End of operations (2019)[edit]

On 28 March 2019, WOW air announced that it was ceasing operations.[6] All flights were cancelled and thousands of stranded passengers were advised to book flights with other airlines.[46][6] The founder of the company, Skúli Mogensen, has spoken of a possible resurrection of the airline[47] with a new, slow-growth business plan, if he receives the $40 million he needs. He plans to re-launch the company with 5 brand new Airbus A321neos.[48] WOW air's website has since been taken down and replaced by a static update page.

Due to the market share of WOW air on the Icelandic air travel market, the airline's bankruptcy caused some disruption in the travel plans of multiple expected visitors.[49] The loss of flights harmed Iceland's tourism and fishing-dependent economy and caused an increase in unemployment; the airline previously delivered over one fourth of all visitors to Iceland, and its failure caused tourist visits to drop 16 percent overall and 20 percent from the United States, prompting a decline in vacation home and hotel construction.[50]

Potential successor airlines[edit]

WAB air, PLAY[edit]

In July 2019, former WOW air executives announced their intention to form a new airline, tentatively named WAB air ("We Are Back"), aiming to operate six aircraft to 14 destinations across Europe and the US.[51] The new company applied for an air operator's certificate from the Icelandic Transport Authority.[52] In November 2019, WAB air was renamed as PLAY.[53]

WOW air (USAerospace Associates)[edit]

On 6 September 2019, USAerospace Associates chairman Michele Ballarin announced that the company had acquired WOW air's assets and would launch flights in October 2019 between Washington Dulles International Airport and Iceland using a United States air operator's certificate. Ballarin did not disclose the price that USAerospace paid for WOW air's estate, but said that the purchase included uniforms, computers and marketing material. Ballarin expressed confidence in the WOW air brand and claimed that US$85 million would be spent to begin operations. WOW air would hire Icelandic staff and would initially operate two aircraft, with plans to expand to 10–12 in the near future. Both Airbus and Boeing aircraft would be used, and the airline would offer both passenger and cargo service, possibly transporting seafood from Iceland to the United States.[54]

As of 17 September 2019, USAerospace Associates had not stated a firm inaugural service date, and neither Dulles nor Keflavík airport would confirm that the company had made arrangements to use airport facilities. Additionally, no application for an air operator's certificate had been filed with the United States Department of Transportation, although observers conceded that the company could begin flights under an existing airline's certificate.[55]

As of 8 October, USAerospace Associates intended to start ticket sales in November and flights in December, though it did not give any details of schedules or destinations. The company noted that the recent failures of a number of carriers meant that more used aircraft were on the market.[56] On 28 October, an airline spokesperson said that WOW air would initially transport cargo only, but intends to "eventually" offer passenger service to mainland Europe.[57]

On 28 February 2020, WOW Air announced on social media that it would be "landing soon in Rome and Sicily" and commencing passenger and cargo operations "in the very near future". WOW Italy would be a part of "WOW World".[58] Giuseppe Cataldo would be the director of the Italian entity.[59]

Destinations[edit]

Before March 2019, WOW air had operated services to a total of 20-year round and 6 seasonal destinations[1] in Europe, the U.S., Canada, and the Middle East from its base at Keflavík International Airport.[60]

Fleet[edit]

Former WOW air Airbus A330-300

WOW air's first planes were two Airbus A320s leased from Avion Express, both of which were nearly 20 years old when the airline started operations in 2012.[61] At the time of bankruptcy and cessation of operations on 28 March 2019, the airline had an all-Airbus fleet consisting of the following aircraft:[62][63]

WOW Air fleet
Aircraft In Service Orders Passengers Notes
W Y Total
Airbus A321-200 5 8 192 200[63] 1 was wet-leased to Aruba Airlines.[33]
3 8 202 210[63]
Airbus A321neo 2 8 192 200[63]
Airbus A330-900neo 4[64] 2 sold to Citilink
2 sold to Thai AirAsia X
Total 10 4

Previous fleet[edit]

References[edit]

  1. ^ a b c wowair.us - Our destinations. Retrieved 9 February 2019
  2. ^ a b aerotelegraph.com - "Fleet nearly cut by half: WOW air does not want their A330s anymore" (German) 14 December 2018
  3. ^ a b "Company Overview of WOW air hf". Bloomberg. Retrieved 28 March 2019.
  4. ^ Get in touch - wowiceland.co.uk "WOW air Katrínartún 12, 105 Reykjavík"
  5. ^ Zhang, Benjamin (29 March 2019). "22 famous airlines that have gone out of business". Business Insider. Retrieved 30 March 2019.
  6. ^ a b c "End of Operation of WOW AIR". Icelandic Transport Authority. WOW AIR has ceased operation. All WOW AIR flights have been cancelled.
  7. ^ "From Layover to Stayover". travelweekly.com. Retrieved 15 November 2020.
  8. ^ Thomas, Michael (26 May 2017). "A Plane Crash, A Glacier, And An Entrepreneur: How Icelandair Opened Up Air Travel For Everyone". Fast Company. Retrieved 15 November 2020.
  9. ^ Brothers, Caroline (17 February 2009). "Sigurdur Helgason, 87, Airfare Pioneer, Dies (Published 2009)". The New York Times. ISSN 0362-4331. Retrieved 15 November 2020 – via NYTimes.com.
  10. ^ McClanahan, Paige (13 October 2020). "Iceland Tourism Prepares for a Comeback". The New York Times. ISSN 0362-4331. Retrieved 13 November 2020.
  11. ^ Elliott, Alëx (20 September 2015). "WOW air Owner Investing Millions". Iceland Review. Retrieved 20 December 2017.
  12. ^ "Board of Directors | WOW air". wowair.co.uk. Retrieved 20 December 2017.
  13. ^ "How a tiny budget airline single-handedly turned Iceland into America's favorite vacation spot". Business Insider. Retrieved 20 December 2017.
  14. ^ Goodman, Peter S.; Alderman, Liz (25 August 2019). "Iceland's Purple Planes Are Grounded, and With Them, Its Economy". The New York Times. ISSN 0362-4331. Retrieved 16 November 2020.
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  16. ^ "How Wow Air's CEO charted his own course despite never having had a 'job'". financialpost. Retrieved 16 November 2020.
  17. ^ "Iron Maiden Singer to Buy Astraeus, WOW Sets Off". Iceland Review. 24 November 2011. Retrieved 13 November 2020.
  18. ^ "WOW air launches flights from Iceland to Europe with Paris service". anna.aero. 7 June 2012. Retrieved 13 November 2020.
  19. ^ a b "Our Story | WOW air". wowair.us. Retrieved 27 October 2017.
  20. ^ JNi.Media. "Iceland's WOW Air to Offer Tel Aviv – New York $149 RT Flights | The Jewish Press - JewishPress.com | JNi.Media | 19 Iyyar 5777 – 15 May 2017 | JewishPress.com". www.jewishpress.com. Retrieved 18 January 2018.
  21. ^ "WOW Air expands to Canada, rolls out $75 flights to Iceland". USA TODAY. Retrieved 18 January 2018.
  22. ^ "WOW Air CEO bullish on U.S. market". USA TODAY. Retrieved 18 January 2018.
  23. ^ "California - Summer 2016". WOW air. Retrieved 16 June 2016.
  24. ^ "You can now fly from the US to Europe for $70 – but one day it might be free". Business Insider. Retrieved 5 October 2017.
  25. ^ "Wow launches $99 one-way fares from SFO-Iceland, $199 to Europe". SFGate. Retrieved 5 October 2017.
  26. ^ Calder, Simon (9 November 2017). "The viral story about £99 flights to New York is fake news". The Independent. Retrieved 29 March 2019.
  27. ^ "Icelandic airlines: WOW air over-inflated - and burst". CAPA - Centre for Aviation. Retrieved 28 November 2020.
  28. ^ Josephs, Leslie (27 June 2018). "'We have to do better.' WOW Air's CEO faces angry customers—and readies an expansion". CNBC. Retrieved 28 November 2020.
  29. ^ Kaminski-Morrow, David (5 November 2018). "Icelandair Group to take over budget rival Wow Air". Flightglobal.com. Retrieved 5 November 2018.
  30. ^ Jakob Wert (5 November 2018). "Icelandair acquires WOW Air". International Flight Network. Retrieved 5 November 2018.
  31. ^ "Wow Air returns four aircraft in face of cash crunch". Flightglobal. 27 November 2018.
  32. ^ independent.co.uk - Wow Air: Icelandic airline hands back four planes as cash crisis worsens 28 November 2018
  33. ^ a b c d ch-aviation.com - WOW air returns 4 aircraft, Icelandair takeover uncertain 28 November 2018
  34. ^ David Kaminski-Morrow (29 November 2018). "Icelandair Group scraps Wow Air takeover". Flightglobal.
  35. ^ Edward Russell (29 November 2018). "Indigo reaches tentative agreement to buy Wow Air". Flightglobal.
  36. ^ business-standard.com - Cheapest India-US flight to end as Wow Air set to exit Delhi route in Jan 14 December 2018
  37. ^ routesonline.com - WOW air 2019 network adjustment as of 14DEC18 14 December 2018
  38. ^ Moores, Victoria (16 January 2019). "Indigo to initially take 49% stake in Wow Air". atwonline.com.
  39. ^ "Indigo Partners has cancelled its proposed investment in Icelandic low-cost carrier Wow Air, prompting the airline to resume talks with Icelandair Group". FlightGlobal. Reed Business Information Limited. 21 March 2019. Retrieved 22 March 2019.
  40. ^ Kaminski-Morrow, David (24 March 2019). "Icelandair Group pulls out of Wow Air discussions". FlightGlobal.
  41. ^ Calder, Simon (25 March 2019). "Wow Air cancels flights amid fears of possible collapse". The Independent.
  42. ^ Elliott, Alexander (25 March 2019). "WOW air fate expected today". RÚV. Retrieved 26 March 2019.
  43. ^ Wert, Jakob (25 March 2019). "WOW Air cancels several flights following aircraft repossessions". International Flight Network.
  44. ^ "Media". wowair.is. 26 March 2019. Retrieved 27 March 2019. Bondholders have formally approved to convert their bonds into equity and formal discussions with investors have commenced to fund the company. This is an important milestone in financially restructuring the company and secure the long-term sustainability of WOW air.
  45. ^ "Wow Air postpones flights ahead of new investment deal". Flight Dashboard. Flightglobal.com. 28 March 2019.
  46. ^ "Wow Air failure: 'They gave us pizza - then cancelled our flight'". BBC News. 28 March 2019. Retrieved 28 March 2019.
  47. ^ "WOW Air's Former CEO Already Looking To Start "New" Airline". The Reykjavik Grapevine. 4 April 2019. Retrieved 24 May 2019.
  48. ^ Bright Sun Films (17 May 2019), Bankrupt - WOW Air, retrieved 8 June 2019
  49. ^ "Áhrif Falls WOW Air á Bílaleigubókanir - Northbound.is". Northbound. 9 April 2019. Retrieved 29 April 2019.
  50. ^ Goodman, Peter S.; Alderman, Liz (26 August 2019). "Iceland's Purple Planes Are Grounded, and With Them, Its Economy". The New York Times. Retrieved 10 September 2019.
  51. ^ Burbaitė, Rūta (17 July 2019). "'We Are Back': defunct WOW air breathes life into new LCC". aerotime.aero.
  52. ^ "WAB air has requested its AOC". Aviation24.be. 16 July 2019.
  53. ^ Hafstað, Vala (5 November 2019). "New Icelandic Airline, Play, on the Way". Iceland Monitor. Retrieved 6 November 2019.
  54. ^ Einarsdóttir, Gréta Sigríður (6 September 2019). "WOW Air to Fly Again in October". Iceland Review. Retrieved 9 September 2019.
  55. ^ Sampson, Hannah (17 September 2019). "Wow Air's new owner wants to 'make flying fun again.' But is the rebooted airline ready to take off?". The Washington Post. Washington, D.C. Retrieved 24 September 2019.
  56. ^ Wolfsteller, Pilar (8 October 2019). "Wow Air's new owner now plans December relaunch". Flightglobal.com.
  57. ^ Ćirić, Jelena (28 October 2019). "New WOW air to Transport Cargo Before Passengers". Iceland Review. Retrieved 6 November 2019. Gunnar Steinn stated the airline will initially focus on cargo transport rather than passenger transport. Operations with begin with two planes transporting fish and other goods, and will expand based on demand. The airline aims to eventually offer regular passenger flights to mainland Europe.
  58. ^ Lapers, Thibault (27 February 2020). "The new WOW air to land in Italy". Aviation24.be.
  59. ^ "Launching Soon: WOW Air Italy, Or Something". One Mile at a Time. 27 February 2020.
  60. ^ wowair.co.uk - Our destinations retrieved 9 February 2019
  61. ^ Gísli Freyr Valdórsson. "Baldur Oddur: Skoðum flug til Ameríku síðar" [Baldur Oddur: Let's look at flights to America later]. Viðskiptablaðið (in Icelandic). Retrieved 17 December 2020.
  62. ^ "Icelandic Aircraft Register search results for aircraft operated by WOW air". Icelandic Transport Authority. Retrieved 21 June 2017.
  63. ^ a b c d "WOW aircraft". WOW Air. Retrieved 9 February 2019.
  64. ^ "Iceland's WOW air to lease four A330neo from CIT Aerospace". Retrieved 24 May 2017.

External links[edit]

Media related to WOW Air at Wikimedia Commons