The defunct Icelandic low-cost carrier WOW air is reportedly set to resume flight operations as soon as October 2019. The transatlantic airline has been taken over by a U.S. aviation firm, ending months of speculation about plans for the revival of the carrier.
After it abruptly ceased operations in March 2019, Iceland’s WOW air is to be rebuilt by USAerospace Associates, a U.S. holding company specializing in the aviation sector. The company, together with local investors, have reportedly acquired WOW air’s assets and plan to relaunch the transatlantic budget carrier under the WOW air brand in October 2019.
The revived carrier will start out by flying between Washington DC and Reykjavik, Iceland, operating just two aircraft, with plans to increase this number to four in summer 2020 and potentially 10 to 12 planes long-term.
Future destinations are still being discussed but should generally be similar to the former WOW’s, as the new owners of the airline strive to retain the same business model, focusing on low-cost transatlantic operations.
The news was revealed by Michelle Ballarin, chair of USAerospace Associates, at a press conference in Reykjavik, on September 6, 2019, as reported by local newspaper Visir. According to Ballarin, who will be the chair of the resurrected airline, $85 million investment has been secured to relaunch the budget carrier.
The new WOW air will operate under a U.S. air operator’s certificate (AOC) and will be based in Washington Dulles International Airport (IAD) with Reykjavik Keflavik (KEF) as its main operations center in Europe.
As for the ‘wow’ factor, although the airline is to carry the same name and logo as the former WOW air, retaining its signature purple color, it seems that Ballarin has quite a vision for the revived carrier, including an in-flight menu with meals created by a Michelin-starred chef, and a lounge for WOW air passengers at Leifur Eiríksson Air Terminal at Keflavik airport.
Besides commercial passenger flights, cargo flights are also planned for the revived WOW air, including seafood transport from Iceland to the U.S., Frettabladid reports.
Ballarin’s interest in WOW air came to the attention of the Icelandic media a couple of months ago when USAerospace Associates’ first attempt to purchase assets within WOW air’s bankruptcy estate fell through due to delayed payments.
Since then, Ballarin’s various business ventures, as well as the company’s capability to restore and run the defunct airline, have all been questioned.
Longing for WOW air
There is great interest within Iceland to have WOW air return to the skies. The airline’s sudden collapse, announced in March 2019, seemed to signal the end of cheap flights to the country and the possible decrease in tourism, a major industry sector in Iceland.
In July 2019, together with rumors of USAerospace Associates’ interest in WOW air’s revival, two former executives of the airline and an Irish investment fund related to the Ryanair family also emerged with a separate plan for the new WOW air, local news media Fréttablaðið and Iceland Review reported at the time.
The new budget airline was to be established under the working name WAB, or “We Are Back”, and begin operations in the fall of 2019. Last reported, the two ex-WOW air managers behind this revival effort, Arnar Már Magnússon and Sveinn Ingi Steinþórsson, were holding talks with domestic banks for a possible investment and had applied for an AOC in Iceland.
End of operations
Established in 2011 by now former CEO Skúli Mogensen, WOW air expanded quickly, pioneering in low-cost air travel between Europe and North America. However, the airline’s impressive growth was followed by deepening financial losses in recent years.
In August 2018, a leaked presentation revealed the airline was seeking investors, as it suffered a $13.5 million loss in 2017 and was bracing for another $28 million downfall in 2018, The Reykjavik Grapevine reported at the time.
WOW air initiated a restructuring process at the end of 2018. The carrier reduced fleet, route numbers, and unfortunately, fired hundreds of its employees. Talks also began with the country’s flag carrier and WOW air’s rival Icelandair.
The Icelandair Group was meant to purchase WOW air and incorporate its aircraft and routes into its own network, but pulled the plug, having already signed a purchase agreement of all of Wow Air’ shares, just three weeks before in November 2018.
Following the fiasco, WOW air’s management began discussions with Indigo Partners, a U.S. equity firm which owns several low-cost carriers, including Frontier Airlines and JetSmart, but those talks eventually broke down as well. WOW Air turned to Iceland for a last-ditch attempt to secure a rescue package and stay afloat. In the same way that Icelandair pulled out at the end of November 2018, it did so this March.
On March 26, 2019, suspicions of multiple WOW air’s aircraft being grounded surfaced. Two days later, the Icelandic carrier announced it is ceasing operations. To this day, the airline’s official website still displays the travel alert on how stranded passengers could get a refund if they were affected by the sudden bankruptcy.
