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Aviation: WOW-woes continue

The Aviation Oracle last wrote about the problems facing WOW air two weeks ago on November 29 - the rise and decline of an Icelandic airline.

Although there is the prospect of a new investor waiting in the wings, the carrier's troubles have continued. Today the firm laid off 111 of its full time staff along with most of its contractors, taking the total made redundant to between 350 and 400. This adds to 237 people working on the ground at Keflavik airport who lost their jobs in November. The WOW air fleet will also be cut further with the removal of the one remaining Airbus A330 long-haul widebody and more smaller narrowbodies. The airline will retain just 11 A320s and A321s, a significant reduction from the peak when it flew 20 aircraft. Four new A330neos that the carrier has on order will not be delivered. The carrier retains around 1,000 employees who will continue to run flights between Europe, Iceland and North America but services to Delhi and Los Angeles are expected to be terminated.

WOW air is laying off staff and reducing its fleet. (photo: Marvin Mutz)

Chief Executive Officer Skúli Mogensen told employees that it was"the biggest and most difficult restructuring in the history of the airline which includes making some very tough decisions." He added that he intends to take the airlines "back to our roots as an ultra-low cost airline and focus on our core business which served us so well in our first years up until 2017."

Acknowledging that WOW air had complicated its business by adding the wide body aircraft and introducing Premium and Comfy products that were not part of the original vision, he continued "we lost focus and started behaving like a legacy airline." Skúli admitted that he could not "blame anybody but myself for those mistakes as I personally championed the A330 fleet expansions, premium seating and to fly further east and west."

Phoenix-based Indigo Partners, which has shareholdings in low-cost carriers such as Frontier Airlines and Wizz Air, has made a bid to acquire the struggling Icelandic airline. Due diligence continues. Skúli concluded that with the prospect of new investors he wants to: "to go back to our original vision and demonstrate that we can indeed build a great low cost long haul airline."

Its possible that the latest developments are driven by a potential incoming partner that has a strong track record in turning round ailing airlines. But The Aviation Oracle wonders whether there is space in the market for two Icelandic airlines - the home market is limited, and there is only limited demand for transatlantic no-frills travel that involves a transfer at Keflavik. Low-cost long haul has been a challenge for most operators that have tried it - partly because it raises challenges related to aircraft and staff utilisation but also because some full-service airlines have reduced fares and offered tickets without extras such as baggage, seat selection and meals.

Text © The Aviation Oracle

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