WOW air, the Icelandic ultra-low-cost-carrier, which ceased operations in March 2019, may soon be ‘coming back’ to the skies, only not in its original form. Two former executives of the airline and an investment fund related to the Ryanair family plan to launch a new low-cost carrier (LCC) on the foundations of the fallen WOW air, under the working name WAB, which stands for “We Are Back”, Icelandic media reports suggest.

Ties with Ryanair

Iceland’s newest budget airline is to be established by two former WOW air managers, Arnar Már Magnússon and Sveinn Ingi Steinþórsson, as well as an Irish investment fund Avianta Capital, local news media Fréttablaðið and Iceland Review write. Discussions were held with two domestic banks – Arion Bank and Landsbanki – requesting a one-year loan of $34.9 million (ISK 3.9 billion) as equity for Avianta to secure a loan from a Swiss bank. Avianta is owned by Aislinn Whittley-Ryan, the daughter of Michael Kell Ryan, who was one of the founders of Ryanair.

According to the news reports, Avianta Capital has committed to invest around $40 million (ISK 5 billion) into the new LCC to secure the first three years of the airline’s operations. With the funding, Avianta will acquire a 75% stake in the startup and the remaining 25% will belong to a company called Neo, partly owned by the two former WOW air executives - Arnar Már Magnússon and Sveinn Ingi Steinþórsson.

Steinþórsson, who was WOW air’s director for financial planning and analysis, will be the new carrier's CEO, while Magnússon, who was the company’s VP of operations, will become the airline’s deputy CEO and director of operations. In addition, John Bavister, who manages Avianta Capital with Simon Whittley-Ryan, husband of Aislinn Whittley-Ryan, will take the position of finance director per request of the investment fund.

And if the Ryanair-family ties have not been obvious enough, here is another fact: the founders of the startup are being consulted by another Irish company – Irelandia Aviation, as advised by Avianta Capital. Irelandia is a low-cost carrier developer, which has invested in five airlines, including the good-old Ryanair, Tiger Airways, Allegiant Air, Viva Aeurobus and Viva Colombia; it is managed by Declan Ryan, a former CEO of Ryanair.

‘WAB’ in the making

According to Fréttablaðið, the new budget airline, or WAB, is expected to commence operations in the fall of 2019. Initially, the startup should operate six aircraft on 14 destinations across Europe and the U.S., filling the market gap left by WOW air. Founders of the new LCC expect the airline will carry one million passengers in 2020, generating revenues of around $159 million (ISK 20 billion). The plans, outlined in a recent memorandum, also include hiring 500 staff in the first year of operations.

The representatives of the new airline have already applied for an operating license. “We have applied for an airline operating license and are well prepared,” Sveinn Ingi Steinþórsson was quoted as saying by Iceland Review on July 16, 2019. But founders of the new LCC may find the latest news on WOW air quite troubling.

A recent report by Fréttablaðið states unnamed U.S. parties have purchased WOW air’s key assets, including the carrier’s trademark and logo, computer software, domain name, uniforms and other assets. The purchase sum „runs in the hundreds of millions” of Icelandic króna (ISK), the paper writes.

The buyers are claimed to have decades of experience in airline operations in the U.S., Europe and elsewhere. None of the WAB initiators have reportedly taken part in the transaction. The airline they are hoping to launch, based on WOW air’s business model and philosophy, would meet a tough challenge if the defunct airline were to be brought back.

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After going through months of financial difficulty, the low-cost Icelandic airline WOW Air eventually announced on March 28, 2019, that it would cease operations.