# WOW Air ceases operation



## VAtrainfan (Mar 28, 2019)

https://www.cnn.com/2019/03/28/business/wow-air-scli-intl/index.html

As much as I believe low-cost carriers are just as important as legacy/network carriers for competition and opening up travel to people who otherwise couldn't afford it, WOW's business model was the epitome of how not to run an airline. Reportedly they lost an average of €50 per passenger.


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## Devil's Advocate (Mar 28, 2019)

I'm not even sure why so many companies still want to become airlines. Depending on the current economic cycle airlines are variously dependent on government subsidies, dirt cheap fossil fuel, dwindling corporate contracts, and fickle consumers. Even when times are good the profit margins can be extremely tight. If everyone and their brother wants to start yet another airline then so be it, but maybe there should be a mandatory front-funded wind down account that can be used to recover stranded passengers and refund people who have not yet left their origin. It's crazy that defunct airlines can simply tell their customers they're SOL and best of luck buying a full fare walk-up ticket on another carrier.


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## jis (Mar 28, 2019)

It is said that if you are a billionaire you start an airline to become a millionaire.


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## chakk (Mar 28, 2019)

jis said:


> It is said that if you are a billionaire you start an airline to become a millionaire.



It’s a tough business. For every one (e.g. Southwest) that makes it, there are probably 10 that don’t. And some (like D.C. Air) never get off the ground.


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## jis (Mar 28, 2019)

chakk said:


> It’s a tough business. For every one (e.g. Southwest) that makes it, there are probably 10 that don’t. And some (like D.C. Air) never get off the ground.


Vijay Mallya who started Kingfisher Airline in India is all for practical purposes a fugitive now hiding in the UK from Indian creditors. Kingfisher has completely crashed and burned and out of existence now. In the process Mallya apparently lost most of his brewery empire too.

Naresh Goyal who started Jet Airways just the other day was forced to exit selling his stake for pennies on the dollar (err Paise on the Rupee I suppose). The future of the airline is still up in air, in a manner of speaking. Etihad might pick up the pieces and run with the backing of UAE sovereign funds or something like that.

Just two stories of airlines that did manage to work for a while, but then started falling apart.

OTOH Vistara started in a collaboration between the Tatas and Singapore Airlines appears to be doing fine so far. Incidentally Tatas started the original Air India and ran it until the government took it away from them and proceeded to make a hash of it.


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## Anderson (Mar 28, 2019)

A major issue in the latest run of airlines getting into difficulty has been rapid, unsupported expansion that left them in a position to collapse at a mild gust of wind. This has been part of where Norwegian has gotten into difficulty as well.

NB, Jet Airways lost money for 7 out of the last 9 years and Air Berlin had lost money in 8 out of 9 years leading up to its collapse. Granted that I think in a number of cases those are "accounting losses" (the airline is cash flow positive but is getting depreciated to hell and back and so shows a modest loss instead of a modest profit) but the long histories of losses there suggest that in several of these cases the airline was never viable to begin with.

I do think there's a case to require coverage of tickets at, if not "par", at least at a lower fare basis to the pax (with an FDIC-esque backstop to ensure that the covering airlines at least don't take a bath). The main reason I see the need for this has less to do with passenger inconvenience as such and more to do with immigration overstay concerns, however.


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## GBNorman (Mar 28, 2019)

Well, not sure what Southwest's Pilots and Attendant's unions would think about it, but WOW could wet lease aircraft and crews "for the duration" that their carrier's 738 MAX's fleet is grounded.


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## Asher (Mar 29, 2019)

Checking out WOW airlines destinations, Reykjavik is the last place I'd want to be dumped off.


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## E60JPC (Mar 29, 2019)

Oh, this is bad. I'm supposed to visit Iceland on my honeymoon in May. I booked a return flight on WOW Air between Reykjavik and Baltimore.


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## Ryan (Mar 29, 2019)

anumberone said:


> Checking out WOW airlines destinations, Reykjavik is the last place I'd want to be dumped off.



They actually fly in and out of KEF, and it's pretty awesome. Wife and I did the trip (on Wow) 3 years ago and loved every minute of it.

Now that we've changed the clocks, getting up there to shoot some pictures of the purple planes flying in and out of BWI has been on my list. Lesson learned to not wait. What seems routine may disappear in an instant.


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## JennaP (Mar 29, 2019)

Actually, Reykjavik is not a terrible place to be stranded. If you end up there for a few hours, you can store your luggage and go to the Blue Lagoon - it's a natural spa. Longer and you can go into Reykjavik and see a very neat city. The only real downside is that food is expensive, esp. if you don't like fish.


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## frequentflyer (Mar 29, 2019)

GBNorman said:


> Well, not sure what Southwest's Pilots and Attendant's unions would think about it, but WOW could wet lease aircraft and crews "for the duration" that their carrier's 738 MAX's fleet is grounded.



All of WOW's planes were leased. The only thing WOW owns is debt.


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## PVD (Mar 29, 2019)

One of the big warning signs of their impending demise was when one of their lessors repo'd 2 of their planes stranding passengers. Even if they owned the planes, getting them registered in the US and getting their crews visas and licensed in the US would not be so easy. A wet lease requires the lessor to be Part 135 cert, a waiver would take time, as well as facing stiff opposition on many fronts. I think they (SW) have some 300 series still in storage, not yet scrapped, that could probably be put back in service, flown and serviced by their own staff, rather than attempt to introduce a stub fleet of (10 Airbus planes) that they have no way of supporting. Normally in a wet lease the lessor would be responsible for maintenance, but there is no way WOW could demonstrate an ability to do this.


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## PerRock (Mar 29, 2019)

Southwest stated somewhere that they're not really struggling because of the MAX problems. In reality their MAX fleet takes up a very tiny portion of their entire fleet ~4% of their fleet is MAX-8 & they've not received and MAX-7s. They still mainly use 737-700s.

peter


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## GBNorman (Mar 29, 2019)

To the three immediate respondents, all duly noted with respect.

With the MAX's comprising a greater portion of Southwest's fleet than either AA or UA, I thought the impact on them would be the greatest. Who knows what would be involved to get their stored 773's again airworthy, and maybe all three carriers now see an "end date" in sight.


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