Another Party Is Interested In Reviving WOW Air

News has come out that a US-based party has repurchased all assets from within WOW Air’s bankruptcy estate. The news was revealed by Icelandic business newspaper Viðskiptablaðið last week. Reportedly, a North Virginia businesswoman by the name of Michele Ballarin as well as Oasis Aviation Group, a Washington Dulles-based company she chairs, are the parties involved. This news comes after reports earlier in the month that other individuals had an interest in reviving the airline.

WOW airliner on runway
WOW Air ceased operating earlier this year. Photo: WOW Air

Michele Ballarin

The Icelandic newspaper Morgunblaðið is saying that US Aerospace Associates, also linked with Ballarin, has not yet completed any purchase. However, CH-Aviation reports that in an interview with Morgunblaðið, Ballarin confirmed her plans to start up a new airline from WOW’s assets. With the airline name yet to be public, it would be an Icelandic company with 49% US ownership.

Ballarin visited Iceland last week and revealed that she also met representatives of airport operator Isavia and Icelandic Transport Authority. She says that she intends to work with Isavia to fly two cargo aircraft to Iceland that will carry goods related to Iceland’s fishing industry.

The claim from Ballarin with regards to WOW Air is that USD85 million has been secured for the first two years of the company’s operation. This figure could be raised to USD100 million if needed.

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Plans for the future airline

Ballarin reportedly intends to use Southwest Airlines as a model structure. She plans to operate three A321-200neos, with a goal to increase the size of the fleet to ten and then twelve aircraft of the same or similar type within two years.

Ballarin says that the destinations flown by the new airline would be similar to those of WOW air. Washington Dulles would be an additional location as it is where the headquarters of US Aerospace Associates is located.

Are the claims credible?

Ball­ar­in says that the Washingt­on Aviati­on Aut­ho­rity was “incredi­bly excited” for WOW Air’s arri­val. However, Morgunblaðið also reports that Dul­les Airport representati­ves in Washingt­on do not recogn­ize the claims made by Ball­ar­in. The tourist website Tút­uri reports that its sources claim that Ball­ar­in’s statements are not credi­ble. Dul­les media representati­ves are saying that the Washingt­on Aviati­on Aut­ho­rity is not famili­ar with US Aerospace Associa­tes or Mrs. Ball­ar­in’s aff­ilia­tes.

WOW Air
WOW Air’s long-haul operations took it to Delhi for a short period of time. Photo: Nicky Boogaard via Flickr

No need for another Icelandic airline?

Some high-level voices in Iceland are saying WOW Air doesn’t need any reviving. In another report by Morgunblaðið, Jón Karl Ólafs­son, Chairman of Tra­velco’s Bo­ard of Directors and for­mer CEO of Icelanda­ir Group says it is not necess­ary to have more than one air­line in Ice­land.

Ólafs­son says that the air­line mar­ket in Ice­land is too small but at the same time the com­pe­titi­on has never been grea­ter than it is today:

“What I have said over the ye­ars is that com­pe­titi­on in flig­hts to and from Ice­land has never been grea­ter than it is today. If we just go 10 to 20 ye­ars back when Icelanda­ir was here in the mar­ket, with the entry of smaller air­lines, whet­her it was Arn­ar­flug or Ice­land Express and more, at this time this was primarily at best an oligopoly mar­ket,”

WOW Air faced millions in environmental fees earlier this year. Photo: Wikimedia Commons

Conclusion

We’ll try to keep on top of this strange situation as all of it appears first in Icelandic media reports. Do you think Iceland needs to have more than one airline? Or was WOW Air’s collapse a symptom of an over-saturated market?

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