WOW Air Has Just Returned 4 Planes Amid Now Uncertain Icelandair Aquisition

WOW Air has reportedly returned 4 leased aircraft following further financial difficulty. The airline has returned 2 A320 and 2 A330 aircraft. This is reportedly due to “necessary restructuring” following several financial pressures, including surprisingly the collapse of rival Primera Air. Other factors quoted include the rising cost of fuel and negative publicity. The news all comes after Icelandair offered to purchase its low-cost rival, subject to a shareholder vote taking place on Friday. Even this has been cast into doubt recently, however, as the airline’s CEO Skuli Mogensen sent out a letter to the airline’s bondholders.

WOW Air has returned 2 A330s to lessors, leaving the airline with only 1. Photo: WOW Air

Financial Struggles

This year has been particularly tough for airlines, especially the long-haul low-cost ones. While in the most extreme cases airlines such as Primera and Cobalt have gone bankrupt, even some of the bigger carriers have seen profits drop. In fact, Emirates profits have fallen 53%, a figure attributed to the rising cost of fuel. In a letter to the airline’s bondholders, Mr Mogensen listed the factors that have affected the airline of late:

  • Bad publicity of WOW’s financial state;
  • The collapse of Primera Air;
  • Lessors and Creditors imposing stricter terms;
  • Surging Oil Prices.

Mr Mogensen closes the letter stating: “While this is not a situation any of us envisioned in September and I personally invested EU €5.5 million cash … as I was convinced the funding would be sufficient [for the next 18 months]. [Writing] this note is not taken lightly by any means, and I can assure you that we are taking every step possible to ensure the continuous operation of WOW air.” 

wow air
WOW Air is currently owned solely by Founder and CEO Skuli Mogensen. Photo: WOW Air

“Necessary Restructuring”

According to the airline’s VP Communications, returning 4 aircraft to lessors is part of a necessary restructuring. He went on to state that the return will not affect the airline’s plans to fly to India, while the return of the leased aircraft reportedly had the backing of the lessors. This will leave WOW with just a single A330. The news follows the airline cutting the number of routes offered over the past few months and is particularly worrying about the future of the airline. In fact, this is especially true if Icelandair’s shareholders don’t approve a purchase of the airline.

According to an interim financial statement released in late June, the airline made a significant loss of $47,664,311 for the first 6 months of 2018, this is almost doubled from $24,986,147 for the same period last year. Simple Flying has approached WOW’s VP Communications, Svana Friðriksdóttir, for comment.

Do you think Icelandair’s purchase of the airline will be approved? If not, do you think WOW Air can survive? Let us know in the comments below!