Little more than a week after the collapse of WOW Air, the airline’s CEO is seeking to effectively relaunch the airline. Skúli Mogensen is seeking investment for a new airline to operate on the same principle of WOW Air. In fact, many of the key people in the new proposition previously served with WOW.
Last Thursday WOW Air declared bankruptcy, suspending all future flights. As such, thousands of passengers were left stranded across the globe. WOW’s competitors were forced to offer rescue fares to repatriate them.
WOW’s CEO is currently trying to find investors for a new airline. The new airline would effectively be WOW Air relaunched. In fact, the airline would buy WOW’s remaining assets. The airline would initially be launched with five aircraft, comprised of four A321neos and one A320neo. The new airline is seeking an investment of $40 million USD. Investors in the airline would be granted 49%, while Skúli would retain 51%.
In addition to Mr Mogensen retaining his CEO position, he would be joined by a number of high profile staff who were also involved in WOW Air. In an investor presentation obtained by Icelandic newspaper Fréttabladid, it is stated that the airline’s management has learnt its lesson. This includes learning from mistakes and sticking to a fully low-cost model.
Slow growth model
The investor presentation states that the airline would initially operate wet-lease services for a large European carrier. This could possibly be to cover one airline’s Boeing 737 MAX fleet being grounded, perhaps even Norwegian.
By the end of June this year, this new airline would be operating to 13 destinations across Europe and North America from Keflavik. Ten destinations would be in Europe, with three in North America. Then by Spring of 2020, the airline’s fleet will comprise seven aircraft. A year later in 2021, the carrier will operate ten aircraft.
Will people invest?
Given the track record of WOW Air, it is unknown whether the new airline will find investors. The business case has been made, stating that management has learnt from mistakes in WOW Air. However, will this be enough to convince investors?
Investors not only need to trust the business plan, but they also need to trust Skúli Mogensen, who was unable to keep WOW Air in business. In fact, it is reported that at the time of its collapse, WOW had failed to pay $300 million. This included payments due to Air Lease Corporation.
Do you think Skúli Mogensen will be able to secure investment for this new venture? Let us know in the comments down below.