Moderators: richierich, ua900, PanAm_DC10, hOMSaR
When asked by USA Today about WOW air service to New York and Dallas/Fort Worth, the company’s Director of Communications Svanhvít Friðriksdóttir said no decisions had been made about whether the airline would continue to fly to those destinations in 2019.
lavalampluva wrote:IMO WW just expanded too quickly. Now things are settling down and the trimming begins.
tphuang wrote:Let’s not lump the two airlines together. There is no proof that fi has any financial issues.
tphuang wrote:Let’s not lump the two airlines together. There is no proof that fi has any financial issues.
axiom wrote:tphuang wrote:Let’s not lump the two airlines together. There is no proof that fi has any financial issues.
While I also would caution against lumping these two enterprises together, your second statement is not true. FI is also in the midst of restructuring following concerning financial results. This has been reported on here and in the aviation press.
tphuang wrote:axiom wrote:tphuang wrote:Let’s not lump the two airlines together. There is no proof that fi has any financial issues.
While I also would caution against lumping these two enterprises together, your second statement is not true. FI is also in the midst of restructuring following concerning financial results. This has been reported on here and in the aviation press.
Reduced earnings and insolvency are completely different issues. Everyone company should make changes if their earnings down. But there is nothing to suggest fi is in any kind of trouble.
mfe777 wrote:
WW's load factors were 90%+ according to the airport statistics.... more a problem with their pricing and model.
LHUSA wrote:mfe777 wrote:
WW's load factors were 90%+ according to the airport statistics.... more a problem with their pricing and model.
On the monthly DFW LF post, I was always curious why WW was commanding such higher LFs than FI. Had to be price.
mfe777 wrote:I wonder why they just don't try raising fares to increase viability of the route, maybe 25-30%, if the loads are so full. I know I would have still paid 30% more when I flew them DFW-KEF-DFW and it still would have been cheaper than FI and way cheaper than AA.
axiom wrote:tphuang wrote:Let’s not lump the two airlines together. There is no proof that fi has any financial issues.
While I also would caution against lumping these two enterprises together, your second statement is not true. FI is also in the midst of restructuring following concerning financial results. This has been reported on here and in the aviation press.
jetero wrote:Did their model ever work to begin with?
FA9295 wrote:http://icelandreview.com/news/2018/10/17/wow-air-cuts-us-destinations
This source states the following:When asked by USA Today about WOW air service to New York and Dallas/Fort Worth, the company’s Director of Communications Svanhvít Friðriksdóttir said no decisions had been made about whether the airline would continue to fly to those destinations in 2019.
Unless of course, if we have confirmation from another source stating that JFK and DFW are ending these flights.
EDIT: Didn't see that the OP posted this link which states that the two routes are ending: https://thepointsguy.com/news/wow-air-axes-jfk-and-dfw/
mjoelnir wrote:axiom wrote:tphuang wrote:Let’s not lump the two airlines together. There is no proof that fi has any financial issues.
While I also would caution against lumping these two enterprises together, your second statement is not true. FI is also in the midst of restructuring following concerning financial results. This has been reported on here and in the aviation press.
We are still talking about Icelandair making less profits, not losses. As in most cases when a company disappoints its shareholders, they will try to do better.
axiom wrote:mjoelnir wrote:axiom wrote:
While I also would caution against lumping these two enterprises together, your second statement is not true. FI is also in the midst of restructuring following concerning financial results. This has been reported on here and in the aviation press.
We are still talking about Icelandair making less profits, not losses. As in most cases when a company disappoints its shareholders, they will try to do better.
I said very clearly that the carriers should not be lumped together, but I also think folks are downplaying the challenges FI is facing. No idea why.
klm617 wrote:Got to go with ATL being the city is the USA that WW is eluding to as being the next North American destination. It's the last big market not connected to KEF outside of IAH and IAH is to far for the A321 and same day turns.
RobK wrote:Wow Air will be history after the Christmas holiday peak.
enilria wrote:What may be happening is simply the death of WOW’s second bank structure. It was creating a lot of problems with the midnight arrivals in the USA for CBP. Of course going back to one bank means parked airplanes.
axiom wrote:mjoelnir wrote:axiom wrote:
While I also would caution against lumping these two enterprises together, your second statement is not true. FI is also in the midst of restructuring following concerning financial results. This has been reported on here and in the aviation press.
We are still talking about Icelandair making less profits, not losses. As in most cases when a company disappoints its shareholders, they will try to do better.
I said very clearly that the carriers should not be lumped together, but I also think folks are downplaying the challenges FI is facing. No idea why.
Deltabravo1123 wrote:jetero wrote:Did their model ever work to begin with?
When airlines start adding routes like WW did, there is a period of success because adding these flights can often stimulate market demand that would otherwise not have been there. So in a way, it might have worked well in the beginning, but soon enough that market demand starts to wear off and the routes don't perform as well as they initially did. This is the position WW seems to be in right now. I'm sure not all of their routes performed exceedingly well right off the get-go, but I'm some did, and then the bookings started to tank. Then they start cut routes. This is the case with some of Norwegian's routes as well.
Back when WW was expanding rapidly, their business model was working because they were a new airline that people wanted to try, and it attracted newcustomers. But as time goes on, this effect fades away. Many were saying that the bubble was going to burst at some point if they kept expanding the way they have. I wish them well, but right now their future definitely seems uncertain.
mfe777 wrote:Why hasn't this thread been changed to "Rumor" or "Report: WOW may axe." There has been literally zero new information except an article by the Points Guy claiming he can't book flights that were never loaded into the system in the first place because the flight was always seasonal..... we need better standards on this forum for what is posted as truth and what is posted as rumors.
a350lover wrote:There is an interesting thing here which I would like to hear your thoughts about.... WOW air does not rely on local traffic from Iceland to support any of their routes. Instead, the main reason to exist for them is TATLT low fares. Despite the remoteness of Iceland, I'd still consider Wow a European player/carrier of this battle which the Atlantic has turned. Icelandexpress, back in 2010 started low-cost services to both EWR and YWG. WOW took over the whole thing in 2012, and truly developed the incipient Iceland-low-cost-long-haul model.
On the other side, USA carriers American, Delta and United (with aggressive fares, yet not exactly low-cost) started flights to KEF, and apparently, even though they mainly serve only the market between "USA-Iceland", this is just alone more profitable than what WOW can make out of Europe-Iceland-America at low cost. One issue arises here to me, and I get there when I try to answer the question: what's the main reason WOW exist in the market? Apparently to fly people between Europe (soon Asia), & America at low fares. However, at this stage of "the TATL battle", there are several carriers which are nearly as cheap or even cheaper, without the need of the stop in Iceland. Compared to the connectivity that the American carriers offer at their end, WOW is always going to have to turn down the fares to survive.
In conclusion, Wow Air is always on the weak side. In front of the European carriers, they will always offer better connections to USA non-stop. In front of the American carriers, they will never be able to fly much farther than "big cities". In front Icelandair, they are the new player and the one that needs to put the fares down to justify the no-frills proposal.
hvusslax wrote:axiom wrote:mjoelnir wrote:
We are still talking about Icelandair making less profits, not losses. As in most cases when a company disappoints its shareholders, they will try to do better.
I said very clearly that the carriers should not be lumped together, but I also think folks are downplaying the challenges FI is facing. No idea why.
FI's problems have been about increasing costs (fuel and rapidly appreciating ISK) and depressed TATL yields because of intense competition. They have been forced to revise their earnings forecast because of these factors but they are still expected to return a profit in 2018. Things have rather moved in a positive direction for FI in the last few weeks. The ISK is getting weaker which decreases their wage costs, fuel costs have stopped rising and it seems like the race to the bottom in TATL fares has stopped and might reverse in the future with the problems that are facing the likes of WOW and Norwegian.
As for WOW. I give them about 30% chance to survive the next 12 months.
usflyer msp wrote:Deltabravo1123 wrote:jetero wrote:Did their model ever work to begin with?
When airlines start adding routes like WW did, there is a period of success because adding these flights can often stimulate market demand that would otherwise not have been there. So in a way, it might have worked well in the beginning, but soon enough that market demand starts to wear off and the routes don't perform as well as they initially did. This is the position WW seems to be in right now. I'm sure not all of their routes performed exceedingly well right off the get-go, but I'm some did, and then the bookings started to tank. Then they start cut routes. This is the case with some of Norwegian's routes as well.
Back when WW was expanding rapidly, their business model was working because they were a new airline that people wanted to try, and it attracted newcustomers. But as time goes on, this effect fades away. Many were saying that the bubble was going to burst at some point if they kept expanding the way they have. I wish them well, but right now their future definitely seems uncertain.
I would question whether WW was actually ever profitable. I don't see how a carrier goes from profitable in 2017 to on the verge of liquidation in 2018. I suspect. There may have been some "creative" accounting going on during their "successful" days...
Bobloblaw wrote:the Iceland tourism bubble is about to burst.