TC957 wrote:

Looks like it might be a tough winter ahead for them.

Natflyer wrote:

According to Icelandic media, WOW Air is looking to borrow 60-120M USD via a bonds issue to be arranged by Pareto Securities. Media (more than one) apparently got their hands on a "draft prospectus" where it is said WOW Air lost 45M USD July 2017 - June 2018. This is likely considering the company´s recent announcement that it lost 22M USD in 2017. Links in Icelandic only.

http://www.ruv.is/frett/wow-aetlar-ad-taka-allt-ad-tolf-milljarda-lan

https://www.frettabladid.is/markadurinn/wow-air-i-milljara-skuldabrefautbo

Increasingly there have been negative news about WOW Air in the Icelandic media recently.

So the losses keep mounting. It could be inferred that WOW Air lost more in 1H 2018 than in all of 2017. Equity down to 4,5% at the end of June.

Wanna lend them money? Will the market?

mjoelnir wrote:

Natflyer wrote:

According to Icelandic media, WOW Air is looking to borrow 60-120M USD via a bonds issue to be arranged by Pareto Securities. Media (more than one) apparently got their hands on a "draft prospectus" where it is said WOW Air lost 45M USD July 2017 - June 2018. This is likely considering the company´s recent announcement that it lost 22M USD in 2017. Links in Icelandic only.

http://www.ruv.is/frett/wow-aetlar-ad-taka-allt-ad-tolf-milljarda-lan

https://www.frettabladid.is/markadurinn/wow-air-i-milljara-skuldabrefautbo

Increasingly there have been negative news about WOW Air in the Icelandic media recently.

So the losses keep mounting. It could be inferred that WOW Air lost more in 1H 2018 than in all of 2017. Equity down to 4,5% at the end of June.

Wanna lend them money? Will the market?

It seems to be, that they have to increase equity before the market lends them money. They are planing to increase the share capital, there is again the question who would invest.

arcticcruiser wrote:

According to WOW Air PR officer, Skuli Mogensen CEO and owner of WOW is unavailable until the end of the month outside of Iceland working on financing...

enilria wrote:

How do you expect them to buy airplanes without issuing debt and bonds? Selling debt is not an indication of financial trouble.

Delta selling over $1b in bonds. https://www.bondbuyer.com/news/municipa ... delta-deal
United sells $300m in bonds. https://www.flightglobal.com/news/artic ... ue-433476/
IAG selling $900m in bonds. https://www.reuters.com/article/uk-iag/ ... FF20130626

Are these airlines also "looking for cash"? Pretty much every month an airline issues bonds or debt. Should we have a thread for all of those?

Natflyer wrote:

According to Icelandic media, WOW Air is looking to borrow 60-120M USD via a bonds issue to be arranged by Pareto Securities. Media (more than one) apparently got their hands on a "draft prospectus" where it is said WOW Air lost 45M USD July 2017 - June 2018. This is likely considering the company´s recent announcement that it lost 22M USD in 2017.

enilria wrote:

arcticcruiser wrote:

According to WOW Air PR officer, Skuli Mogensen CEO and owner of WOW is unavailable until the end of the month outside of Iceland working on financing...

The CEO is also the 100% owner. He is a tech guy who apparently made a lot of money selling the Iceland telecom company to TMobile. They are growing like a weed.
How do you expect them to buy airplanes without issuing debt and bonds? Selling debt is not an indication of financial trouble.

Delta selling over $1b in bonds. https://www.bondbuyer.com/news/municipa ... delta-deal
United sells $300m in bonds. https://www.flightglobal.com/news/artic ... ue-433476/
IAG selling $900m in bonds. https://www.reuters.com/article/uk-iag/ ... FF20130626

Are these airlines also "looking for cash"? Pretty much every month an airline issues bonds or debt. Should we have a thread for all of those?

flymco753 wrote:

I'm not totally worried about WOW having to cease operations due to financing. I can however see them putting out an IPO and there being a fight between Icelandair and the IAG. Icelandair would have huge connectivity if you consider their recent ORD, DFW, DTW, CVG, CLE, and STL additions on top of FI's TPA, PHL and MCI additions.

enilria wrote:

The CEO is also the 100% owner. He is a tech guy who apparently made a lot of money selling the Iceland telecom company to TMobile. They are growing like a weed.

enilria wrote:

arcticcruiser wrote:

According to WOW Air PR officer, Skuli Mogensen CEO and owner of WOW is unavailable until the end of the month outside of Iceland working on financing...

The CEO is also the 100% owner. He is a tech guy who apparently made a lot of money selling the Iceland telecom company to TMobile. They are growing like a weed.
How do you expect them to buy airplanes without issuing debt and bonds? Selling debt is not an indication of financial trouble.

Delta selling over $1b in bonds. https://www.bondbuyer.com/news/municipa ... delta-deal
United sells $300m in bonds. https://www.flightglobal.com/news/artic ... ue-433476/
IAG selling $900m in bonds. https://www.reuters.com/article/uk-iag/ ... FF20130626

Are these airlines also "looking for cash"? Pretty much every month an airline issues bonds or debt. Should we have a thread for all of those?

SpaceshipDC10 wrote:

TC957 wrote:

Looks like it might be a tough winter ahead for them.

Or for the passengers...

FriscoHeavy wrote:

It would be nice if they saved up and paid cash for things (i.e. Airplanes, etc), just as my family does for cars or anything else we want. Then you wouldn't have to borrow and go into further debt. The world needs to get their head around the fact that debt is a killer.

vhtje wrote:

enilria wrote:

How do you expect them to buy airplanes without issuing debt and bonds? Selling debt is not an indication of financial trouble.

Delta selling over $1b in bonds. https://www.bondbuyer.com/news/municipa ... delta-deal
United sells $300m in bonds. https://www.flightglobal.com/news/artic ... ue-433476/
IAG selling $900m in bonds. https://www.reuters.com/article/uk-iag/ ... FF20130626

Are these airlines also "looking for cash"? Pretty much every month an airline issues bonds or debt. Should we have a thread for all of those?

I agree with you, but it rather depends on how the cash raised by the bonds issue is used.

Natflyer wrote:

According to Icelandic media, WOW Air is looking to borrow 60-120M USD via a bonds issue to be arranged by Pareto Securities. Media (more than one) apparently got their hands on a "draft prospectus" where it is said WOW Air lost 45M USD July 2017 - June 2018. This is likely considering the company´s recent announcement that it lost 22M USD in 2017.

$60M USD doesn't buy much aircraft. $120M might buy you a single A321. If they are raising bonds to cover current expenditure and to cover losses, rather than purchase assets, it is worth discussion, do you not think?

zakuivcustom wrote:

An English article:
https://icelandmonitor.mbl.is/news/news ... investors/

Actually not too different from what enilria described

As for WOW's problem. Between a strong krona, increasing fuel prices, and the fact that Iceland tourism growth is slowing down (not necessarily a really bad thing IMHO, but it does hurt bottom lines of WW and also FI), they're losing more money. Their relative low capital level just doesn't help.

https://grapevine.is/mag/articles/2018/ ... rt-losses/

enilria wrote:

The CEO is also the 100% owner. He is a tech guy who apparently made a lot of money selling the Iceland telecom company to TMobile. They are growing like a weed.

Perhaps the CEO is learning the hard lesson of running an airline - aka how to become a millionaire by starting with a billion.

FriscoHeavy wrote:

It would be nice if they saved up and paid cash for things (i.e. Airplanes, etc), just as my family does for cars or anything else we want. Then you wouldn't have to borrow and go into further debt. The world needs to get their head around the fact that debt is a killer.

FriscoHeavy wrote:

It would be nice if they saved up and paid cash for things (i.e. Airplanes, etc), just as my family does for cars or anything else we want. Then you wouldn't have to borrow and go into further debt. The world needs to get their head around the fact that debt is a killer.

zakuivcustom wrote:

FriscoHeavy wrote:

It would be nice if they saved up and paid cash for things (i.e. Airplanes, etc), just as my family does for cars or anything else we want. Then you wouldn't have to borrow and go into further debt. The world needs to get their head around the fact that debt is a killer.

We've seen over and over how austerity alone doesn't work. If everyone is just trying to save up and not spend a dime, the economy goes nowhere. The important thing is knowing how to manage your debt anyway.

arcticcruiser wrote:

Link to the investor presentation

https://kjarninn.overcastcdn.com/documents/WOW_air_Investor_presentation_Presound.pdf

FriscoHeavy wrote:

zakuivcustom wrote:

FriscoHeavy wrote:

It would be nice if they saved up and paid cash for things (i.e. Airplanes, etc), just as my family does for cars or anything else we want. Then you wouldn't have to borrow and go into further debt. The world needs to get their head around the fact that debt is a killer.

We've seen over and over how austerity alone doesn't work. If everyone is just trying to save up and not spend a dime, the economy goes nowhere. The important thing is knowing how to manage your debt anyway.

The economy would grower sustainably, slower, but sustainably after the shock wore off. You wouldn't have huge spikes and dips in the economy/market. It would be a gradual and sustainable rise. People wouldn't be buying homes, cars and gadgets they really can't afford. The world would be much better off after the initial downturn. It's not austerity. It's about purchasing things you can afford and not living a risk filled, debt ridden life.

vhtje wrote:

enilria wrote:

How do you expect them to buy airplanes without issuing debt and bonds? Selling debt is not an indication of financial trouble.

Delta selling over $1b in bonds. https://www.bondbuyer.com/news/municipa ... delta-deal
United sells $300m in bonds. https://www.flightglobal.com/news/artic ... ue-433476/
IAG selling $900m in bonds. https://www.reuters.com/article/uk-iag/ ... FF20130626

Are these airlines also "looking for cash"? Pretty much every month an airline issues bonds or debt. Should we have a thread for all of those?

I agree with you, but it rather depends on how the cash raised by the bonds issue is used.

Natflyer wrote:

According to Icelandic media, WOW Air is looking to borrow 60-120M USD via a bonds issue to be arranged by Pareto Securities. Media (more than one) apparently got their hands on a "draft prospectus" where it is said WOW Air lost 45M USD July 2017 - June 2018. This is likely considering the company´s recent announcement that it lost 22M USD in 2017.

$60M USD doesn't buy much aircraft. $120M might buy you a single A321. If they are raising bonds to cover current expenditure and to cover losses, rather than purchase assets, it is worth discussion, do you not think?

heavymetal wrote:

vhtje wrote:

enilria wrote:

How do you expect them to buy airplanes without issuing debt and bonds? Selling debt is not an indication of financial trouble.

Delta selling over $1b in bonds. https://www.bondbuyer.com/news/municipa ... delta-deal
United sells $300m in bonds. https://www.flightglobal.com/news/artic ... ue-433476/
IAG selling $900m in bonds. https://www.reuters.com/article/uk-iag/ ... FF20130626

Are these airlines also "looking for cash"? Pretty much every month an airline issues bonds or debt. Should we have a thread for all of those?

I agree with you, but it rather depends on how the cash raised by the bonds issue is used.

Natflyer wrote:

According to Icelandic media, WOW Air is looking to borrow 60-120M USD via a bonds issue to be arranged by Pareto Securities. Media (more than one) apparently got their hands on a "draft prospectus" where it is said WOW Air lost 45M USD July 2017 - June 2018. This is likely considering the company´s recent announcement that it lost 22M USD in 2017.

$60M USD doesn't buy much aircraft. $120M might buy you a single A321. If they are raising bonds to cover current expenditure and to cover losses, rather than purchase assets, it is worth discussion, do you not think?

Also, even if they do sale and leasebacks they still have to make hefty PDPs to Airbus and you can't finance those easily as there is no physical asset to mortgage.
$60M will almost certainly purchase a single A321. Nobody is paying $120M for an A321.

DaveFly wrote:

I am searching around for reasonable airfares from EWR -TLV in October. WOW has by far the best bargain, with a two-hour layover in KEF. But after reading all the comments above, including cash position and customer service, I think I ought to pass. Am I being overly worried? Any opinions?

DaveFly wrote:

I am searching around for reasonable airfares from EWR -TLV in October. WOW has by far the best bargain, with a two-hour layover in KEF. But after reading all the comments above, including cash position and customer service, I think I ought to pass. Am I being overly worried? Any opinions?

DaveFly wrote:

I am searching around for reasonable airfares from EWR -TLV in October. WOW has by far the best bargain, with a two-hour layover in KEF. But after reading all the comments above, including cash position and customer service, I think I ought to pass. Am I being overly worried? Any opinions?

DaveFly wrote:

I am searching around for reasonable airfares from EWR -TLV in October. WOW has by far the best bargain, with a two-hour layover in KEF. But after reading all the comments above, including cash position and customer service, I think I ought to pass. Am I being overly worried? Any opinions?

DaveFly wrote:

I am searching around for reasonable airfares from EWR -TLV in October. WOW has by far the best bargain, with a two-hour layover in KEF. But after reading all the comments above, including cash position and customer service, I think I ought to pass. Am I being overly worried? Any opinions?

Yossarian22 wrote:

DaveFly wrote:

I am searching around for reasonable airfares from EWR -TLV in October. WOW has by far the best bargain, with a two-hour layover in KEF. But after reading all the comments above, including cash position and customer service, I think I ought to pass. Am I being overly worried? Any opinions?

I doubt they liquidate any time soon.

As far as the service, I flew them for $150 from ORD to DUB. I had just a 10 KG backpack, had a nice meal at ORD before the flight, and carried own my own water, so it truely did cost me $150 to fly across the Atlantic. The flight was fine, the transfer at KEF was very easy, DUB is outside the Schengen Area, it was basically like a domestic transfer, no security and no passport check, I imagine it would be the same for your flight.

If you know what you are getting into, carry on your own water, maybe some snacks, and don’t need any luggage, and are fine with a random seat assignment, they are a viable option.

The downsides I have read about at TripAdvisor and FlyerTalk are, vanishing seat assignments and recovery from irregular operations. It seems that it is not uncommon for passengers to pay for a seat, and for that seat assignment to disappear at check in. Also, Wow has a small fleet and crew that they are pushing to the limit, so when KEF gets hit by a snowstorm or a plane goes tech, there is not much slack in the system to right the ship, and they will never rebook you on a competitor. I’d say the biggest advantage of flying a legacy rather than Wow (or Norweigen for that matter), is if things go awry, the legacy will more easily be able to get you to where you need to be, in a timely manner.

DaveFly wrote:

Yossarian22 wrote:

DaveFly wrote:

I am searching around for reasonable airfares from EWR -TLV in October. WOW has by far the best bargain, with a two-hour layover in KEF. But after reading all the comments above, including cash position and customer service, I think I ought to pass. Am I being overly worried? Any opinions?

I doubt they liquidate any time soon.

As far as the service, I flew them for $150 from ORD to DUB. I had just a 10 KG backpack, had a nice meal at ORD before the flight, and carried own my own water, so it truely did cost me $150 to fly across the Atlantic. The flight was fine, the transfer at KEF was very easy, DUB is outside the Schengen Area, it was basically like a domestic transfer, no security and no passport check, I imagine it would be the same for your flight.

If you know what you are getting into, carry on your own water, maybe some snacks, and don’t need any luggage, and are fine with a random seat assignment, they are a viable option.

The downsides I have read about at TripAdvisor and FlyerTalk are, vanishing seat assignments and recovery from irregular operations. It seems that it is not uncommon for passengers to pay for a seat, and for that seat assignment to disappear at check in. Also, Wow has a small fleet and crew that they are pushing to the limit, so when KEF gets hit by a snowstorm or a plane goes tech, there is not much slack in the system to right the ship, and they will never rebook you on a competitor. I’d say the biggest advantage of flying a legacy rather than Wow (or Norweigen for that matter), is if things go awry, the legacy will more easily be able to get you to where you need to be, in a timely manner.

Thank you for the very detailed response. I am leaning toward a legacy carrier for all the reasons you state. I’m on a limited time schedule, so I haven’t the time for cancellations. And I’m not a youngster anymore (60s), so I haven’t got the mental or physical flexibility if things go wrong. Also, I would imagine that the TLV flights involve additional security, which could make a two-hour layover unworkable. It just doesn’t seem like a good fit for me, so I’ll just have to pay for the service I need. Thanks again!