WOW Air is dead. Completely dead. The planes are mostly off flying for other airlines while the true financial impact of the collapse remains under debate. And yet. Perhaps there is a chance for another life for the flashy, LCC after all? Former WOW executives are reported to be seeking investment capital to bring a half dozen aircraft online later this year, flying between the US and Europe via Iceland.
The carrier – billed as WAB Air – would be mostly funded by an Irish investment fund, though that group is apparently seeking Icelandic banks to underwrite the bulk of its financial position, against other loans secured from a Swiss bank. All of which is to say that it appears a complex arrangement of capital and corporate structures, enough that it should give a bit of pause to believing that the deal will come through quickly.
Moreover, the timing of the operation is a questionable one. Launching transatlantic services in the winter months, at the bottom of the demand cycle, is a tough position for a new market entrant. Given the limited funding to get the carrier off the ground the operations during a window of relatively low revenue would not be conducive to generating the cash flow necessary to continue the operations longer term. Perhaps knowing that there isn’t much of a chance to generate significant revenue anyways would allow the company to build the name recognition it will need via ridiculously underpriced fares, leading into the Summer 2020 season where it can raise its prices, but that approach has not worked well for similarly situated competitors in the past.
Beyond the short term financial and operational questions come the larger concerns around whether another long-haul LCC in the transatlantic market can survive and thrive longer term. A number of operators proved in recent years that demand can be induced at a sufficiently low price point, but that often ends up below the level that will support the operations. The increase in point-to-point service, particularly on smaller, single-aisle aircraft further draws into question the value of a second airline hubbed in Keflavik. While most A321XLR orders to date have been announced for more traditional hub-based airline operators the ability to overfly hubs on popular routes is also well established. That includes overflying Iceland.
Given no guarantees that the WAB Air operation will even launch, however, this could all just be a fun theoretical exercise.