American Investors Just Bought WOW Air’s Assets

Filed Under: WOW Air

This situation just keeps getting stranger.

We already know about “WAB Air”

In late March 2019, Icelandic low cost carrier WOW Air ceased operations. A couple of days ago I wrote about how there were plans to launch a new low cost carrier in Iceland that looked an awful lot like WOW Air. Some former WOW Air executives plan to launch the airline this fall, with the working name WAB Air (WAB=”We Are Back”).

While some WOW Air executives are behind the new venture, it has nothing to do with WOW Air directly — they haven’t bought any of WOW Air’s assets, and WOW Air’s former CEO is not involved in this venture (which is probably a good thing).

Well, there are now some other investors looking to launch a very similar concept in Iceland.

American investors buy WOW Air assets

It’s now being reported that unnamed American investors have apparently paid cash to acquire all assets related to flight operations from the bankrupt estate of WOW Air.

These assets include the WOW Air logo and branding, its website and domain, flight operations manual, booking system, other software, computers, spare parts, crew uniforms, and more.

It’s reported that the plan is to “resurrect low-cost flight operations to and from the country, both to Europe and the USA on the foundations of WOW air and in accordance with the philosophy that lay behind the low-cost model of WOW air.”

So we really don’t know who is behind this. Could it involve Indigo Partners, which was considering providing funding to WOW Air before they ceased operations? In many ways they’re in a better position now than before, as they can presumably do this all at a lower cost. Is WOW Air’s former CEO involved in this venture?

I guess they assume that it’s beneficial to have access to WOW Air branding, in which case they might have the advantage compared to the other investors hoping to launch operations in Iceland this fall.

WOW Air certainly has name recognition, though I’m not convinced it’s necessarily positive recognition.

It is going to be very, very interesting to see how this all unfolds…

Do you think we’ll see two, one, or no new low cost carriers launch in Iceland in the next year?

Comments
  1. I wouldn’t mind seeing WOW come back. Partly because their aircraft livery is so unique and partly because it’s dirt cheap to get to Iceland and the US from the UK

  2. There’s only a handful of American PE investors who likely would have expertise to sort out such a mess:
    – TPG
    – CCMP Capital
    – Onex
    – Indigo

  3. Personally speaking I haven’t taken and would never want to take flights of WOW, Norwegian, or any other airlines of the kind, but I do love to see their existence, as they at least keep a bit of pressure on the legacy airlines to remain somewhat competitive, especially when nowadays JVs are becoming ever more predominant.

  4. I used to think that carriers such as Icelandair/WOW, Finnair, and other airlines including Gulf carriers using their base as a one stop hub we’re going to be the wave, but with the development of ever thinner routes made possible by new narrowbody planes, I’m not sure if it is as lucrative as I thought. People prefer to spend less time in the air, and if the economics of the newer nonstop routes are as competitive or potentially even moreso than these transit carriers, they may be looking at serious difficulties.

  5. MKLGH,

    You should try them. they might surprise you. Customer satisfaction with low-cost airlines often is higher than the legacy carriers.

    I draw the line at RyanAir and Alllegiant, however.

  6. Love to hear this. The ULCC & UULCCs are always needed to to keep legacy carriers on their toes, helping keep their costs down and service expectations above the least common denominator.

    I have never (and would never) fly a UULLC, but appreciate their effect on the industry.

    UULCCs should get cabin crews down to $11-$14 hr and pilots down to $29-$35 / hr to really drive down costs to lower airfares.

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