Icelandair Backs Out Of WOW Air Deal (For The Second Time)

Filed Under: WOW Air

Update: WOW Air has ceased operations, and all flights have been canceled. Icelandair is offering discounted tickets to passengers stranded by WOW.


I’ll keep it short — things aren’t looking good for WOW Air. At all.

Iceland-based WOW Air has grown like crazy over the past couple of years, though not in a sustainable way. The airline is losing money, and has gotten to the point where they can no longer get financing. The airline has gotten rid of several of their planes and cut most of their US route network.

For the past several months WOW Air has been looking for outside investors:

Well, there’s now an update on that front. Talks have ended between WOW Air and Icelandair. Per a statement from Icelandair:

Icelandair Group has decided that its possible involvement in WOW air’s operations, as announced on 20 March 2019, will not materialize. Therefore, all discussions between the parties have ended.

So yeah, at this point things are looking very, very, very bad for WOW Air. Unless a new investor comes along shortly and is willing to move quickly, their operations may be in trouble.

Comments
  1. I don’t understand why they were given a 2nd chance if they blew it the 1st time. Though I do believe everyone deserves forgiveness, that doesn’t entail offering a business opp’y a 2nd time around. Your thoughts on this?

  2. Yeah, time to take wowair out back and put it down. Who woulda thought an airline would go under charging 30 bucks a ticket for eating 200 worth of gas.

  3. DNN – They didn’t “blow it”, they chose not to buy it. Wow air can hardly afford to pick and choose who they want to talk to given they’re on the verge of collapse.

    Rob – Ask Ryanair that question. They regularly sell tickets WELL below cost yet became Europe’s biggest airline and are very profitable. It’s a sound strategy, you just need to be careful.

  4. No FI would have had to be paid to take WOW! That was an airline working under the old “build it and they will come” principal and they didnt. Also LH LCC with same soft product as a SH LCC is not appealing. It’s mostly a one and done clientele and you cant build a business on that. $1.50 for a bottle of water!!!!

  5. Icelandair didn’t want to buy WOW at all. They just postponed the chance which WOW could get from another investor. Icelandair only wants WOW to fail. They never considered to take over or allow another competitor to enter their home market.

  6. It’s the same LCC model as Ryanair, which works for some carriers. But it’s Iceland. Few, despite those with intrigue in wanting a cheap (flight cost) stopover in an expensive country, will ever want to connect on a flight there to London or wherever. There are too many convenient options at not a lot more in cost. Icelandair makes it work with a brand that’s been around for years and is sustainable in its operations. As well it offers a business class (be what it is) and has a stronger national identity.

  7. They want to convert debts into shares, liabilities into equity. That might be the final nail in the coffin.

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