KCI Flight Schedule Adjustments

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normalthings
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Re: KCI Flight Schedule Adjustments

Post by normalthings » Mon Sep 10, 2018 10:10 pm

It sounds like the Icelandic government has been meeting to discuss the effects of and potential government intervention in a bankruptcy/collapse of WOW airlines.

Both Icelandair and WOW Air lost money last year. However, Icelandair actually owns most of its planes as well as owns a line of successful hotels and other valuable assets. WOW Airlines on the other hand doesn’t have many assets at all. It’s planes are all very new and are financed/leased.

It sounds like Kansas City really did do end up better off getting Icelandair.

dev49
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Re: KCI Flight Schedule Adjustments

Post by dev49 » Tue Sep 11, 2018 4:12 pm

normalthings wrote:
Mon Sep 10, 2018 10:10 pm
It sounds like the Icelandic government has been meeting to discuss the effects of and potential government intervention in a bankruptcy/collapse of WOW airlines.
Link?

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normalthings
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Re: KCI Flight Schedule Adjustments

Post by normalthings » Tue Sep 11, 2018 5:14 pm

dev49 wrote:
Tue Sep 11, 2018 4:12 pm
normalthings wrote:
Mon Sep 10, 2018 10:10 pm
It sounds like the Icelandic government has been meeting to discuss the effects of and potential government intervention in a bankruptcy/collapse of WOW airlines.
Link?
https://www.mbl.is/frettir/innlent/2018 ... u_wow_air/
The article is in Icelandic. I also looked through the comments here https://www.reddit.com/r/Iceland/commen ... ina_mblis/ to get a better understanding on what's happening.

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Re: KCI Flight Schedule Adjustments

Post by dev49 » Wed Sep 12, 2018 8:48 am

I also found this thread on a.net after doing some digging talking about their financials a couple week ago. Doesn't seem like anything super dire, although they are looking for more money. I also can't see Iceland letting them go under at least at the moment, they are making too much off tourism (plus expanding the airport). I guess we will see.

https://www.airliners.net/forum/viewtop ... #p20642701

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Re: KCI Flight Schedule Adjustments

Post by brewcrew1000 » Wed Sep 12, 2018 10:31 am

AerLingus is adding flights to Minneapolis, its possible Kansas City could be in the next batch if this rapid Aer Lingus North American expansion keeps going

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Re: KCI Flight Schedule Adjustments

Post by flyingember » Wed Sep 12, 2018 11:12 am

brewcrew1000 wrote:
Wed Sep 12, 2018 10:31 am
AerLingus is adding flights to Minneapolis, its possible Kansas City could be in the next batch if this rapid Aer Lingus North American expansion keeps going
Yes, please. We want to fly into Ireland in the next few years and a direct flight would be super nice.

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Re: KCI Flight Schedule Adjustments

Post by normalthings » Thu Sep 13, 2018 9:30 pm

dev49 wrote:
Wed Sep 12, 2018 8:48 am
I also found this thread on a.net after doing some digging talking about their financials a couple week ago. Doesn't seem like anything super dire, although they are looking for more money. I also can't see Iceland letting them go under at least at the moment, they are making too much off tourism (plus expanding the airport). I guess we will see.

https://www.airliners.net/forum/viewtop ... #p20642701
Looks like WOW has $448million USD assets and $428million USD noncurrent and current liabilities and $448million in subordinate capital and liabilities per their own presentation. $590 Million USD of the liabilities is from interest bearing debt and operating leases. EBITDA of -$26million USD in the last 12 months.Equity is currently 4.5%

WOW has been traveling around trying to sell a “bridge loan” which would provide operating funds until they can sell equity in an IPO roughly 18 months from now. Rumor is that multiple banks have denied them. The dominant Icelandic news this week has been that WOWs will collapse if this bridge loan is not secured

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Re: KCI Flight Schedule Adjustments

Post by beautyfromashes » Thu Sep 13, 2018 10:24 pm

^ How would WOW going under affect Icelandair? Would they increase routes to cover demand that would have gone to WOW or increase prices?

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normalthings
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Re: KCI Flight Schedule Adjustments

Post by normalthings » Thu Sep 13, 2018 11:14 pm

Icelandair would 100% raise prices in order to regain profitability.

WOWs demand is different than Icelandair in the same way that Spirits is different than SWA or Delta. Thus, I don’t think Icelandair would grow to all of WOWs US markets, at least not immediately.

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Re: KCI Flight Schedule Adjustments

Post by STLguy1 » Sat Sep 15, 2018 12:41 am

I suspect that Iceland will bail either of these financially strapped airlines out if either gets into financial ruins. But, read on (good news below).

Either of the airlines bellying up with put Iceland's tourism into ruins as well. It would throw Iceland and the Krona into a huge recession.
see here: https://now.guidetoiceland.is/2018/09/1 ... sm-sector/

Icelandair is also in financial hardships. They just cancelled their winter schedule in/out of several cities including Cleveland to save money. Their CEO just dropped out like their stocks did too. Here is a recent article a couple weeks ago.
https://skift.com/2018/08/28/icelandair ... sm-market/

NOW THE GOOD NEWS...

The Krona exchange rate fell last week on the financial woes of WOW and Icelandair - specifically because of tourism (the main economic impact to Iceland today). If either of the airlines would fail, tourism would collapse in the country.

Yes, that doesn't sound good, but here is the silver lining as of today...

On Friday, September 14:
-from the article link below-
WOW air has been working with Pareto Securities, a Norwegian corporate finance company which has worked with Norwegian Airlines and Icelandair previously, to establish how to improve the bond issue. The result was that financing of between 6 – 12 billion krónur would be required to sustain the business and continue expansion—albeit at a slower rate than before.

A plan is being put in place for WOW air to restructure the business financially before going onto the stock exchange within 18 months, reports RÚV. Mogensen confirmed that bondholding investors will receive priority for shares and at a discounted rate of 20% off their share prices.

Mongensen has contacted the current investors to seek further funding and a meeting has been held on 14th September with only €5 million of stock still needing to be bought. Króna exchange rates have responded by increasing again and WOW air’s future looks more secure than it did a week ago.
Article Posted Friday Sep 14 Evening:
https://www.icenews.is/2018/09/14/wow-a ... ry-so-far/

This is good news for Iceland.

We fly WOW Air for a second time from STL to KEF tomorrow and next week home. Both flights are sold out on the A321-200 (208 seats). We flew WOW from STL to KEF to FRA (Frankfurt Germany) in June and loved it really. The planes are brand new, comfy and more leg room than on our A330's we fly to EU otherwise. The service was excellent too. We did upgrade to the XXL seats and full class service (bags, meals, etc) then and now.

In July we flew Icelandair from MCI to KEF and enjoyed it too. The plane was a little small for along haul flight (we took standard seats - biz class was too far expensive). The service was excellent too.

They are both very comparable IMO. If you want a cheap seat on WOW in the back of the plane and you take only a personal item and that's it - then you may be tight but you get what you pay for. WOW's planes offer all front seats as XL or XXL or Big Seat (which is like first class seats) - you pay more - you get more and comfort too.

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