Icelandic budget carrier WOW air collapsed just weeks ago after months of drowning in financial woes. But if the troubled airline's founder and CEO has his way, its demise won't be permanent.
Former WOW air CEO Skuli Mogensen is trying to rebuild the airline, Icelandic newspaper Frettabladdid reports. According to a translation of the story, Mogensen envisions the revived airline will “pursue a hard low-cost policy similar to” WOW's previous business model.
That's right – the same “hard low-cost policy” that led to WOW's collapse in the first place. The business model that triggered its slow death, cutting routes left and right, informing passengers of cancellations weeks late, and trying to pressure travelers to accept gift cards rather than refunds on a dying airline.
Mogensen's pitch to investors was to set up shop by starting as a leasing airline to fill in for other major European airlines – starting by buying back some of WOW air's planes. But by June, Mogensen envisions flying to 13 destinations from Reykjavik (KEF), including Boston (BOS), Baltimore (BWI), and New York.
Our Analysis
There's no doubt that Mogensen learned from the collapse of his airline. And we're all for more competition – WOW air was once one of the most successful low-cost airlines flying across the Atlantic Ocean, helping drive down prices on major airlines while offering dirt-cheap fares.
But this seems like a long shot. A prominent hedge fund backed out of a takeover bid in WOW air's final weeks, and Icelandair declined twice to help out. With the same approach to breaking through the market as a budget airline, what has changed?
And more to the point: After its collapse, what travelers will book flights on this refreshed WOW? Certainly, some will be wooed by cheap fares.
It's a tough time to run budget airlines, and WOW air isn't the first to fizzle out.
Primera Air collapsed overnight, among other budget airlines that have folded in recent months. Even the mighty Norwegian Air, perhaps the best-known and most stable low-cost carrier flying across the Atlantic Ocean, is struggling.
Mogensen and his partners are asking investors to bet on what appears to be the same vision.
Bottom Line
For the sake of Iceland's economy, WOW air's laid-off employees, and cheaper fares to Europe, we hope this works. We're just not sure it will.
Other people’s money. Get other people to give you money to start an airline. Give yourself a golden parachute. Go out of business. Repeat till you found all the fools.
I lost 1500$ worth of tickets and haven’t gotten a cent back. I even had travel insurance, AIG Travel Guard refused to honor the claim because “carrier insolvency wasn’t covered”
This guy should be in Jail, while anyone will invest with him is beyond my understanding
AIG and Travel Guard are in cahoots with Expedia, that was not insurance, it was a scam, Expedia, Travel Guard/AIG are as responsible as Wow Air, they knew they were going out of business and silt tickets and insurance policy’s that were a total scam. From now on use “Hopper” they took care of all their customers, reimbursed them, and got them new flights. Never use Expedia and never use travel guard.
Everyone who reads this please contact their attorney generals office and file a formal complaint.
I would NEVER trust anything or anyone associated with this white collar con artist.
He literally stole money by selling tickets right up to the last possible second. He should be in jail. Kind of makes one wonder where he lives. If people who he scammed found out where he and his family lived what would happen?
I would think more than a few protesters would steak-out his and his family’s homes. This guy not only stole money from individuals but stole ruined dream vacations that took forever to save and budget for.
I feel sorry for his family, he disgraced his entire family, what a burden of shame his family must feel. He needs to see jail time in the type of prison reserved for terrorists so protection laws don’t apply.