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CEO Skuli Mogensen (photo: Wow air)

WOW sets sights on Asia, tries to secure capital

The airline’s chief executive describes future potential, but the Icelandic government reportedly has its eye on the company.

Having launched sales to Delhi, Iceland’s “ultra-low cost” carrier Wow air wants to make Asia its next target, its chief executive Skuli Mogensen says. But it is still looking to raise capital.

“Iceland, strategically and geographically, can’t be replaced unless you build an island in the Atlantic,” he says of the opportunities the airline has, as quoted by TTG.

“If you fly Delhi or Mumbai to Boston, you fly directly above Iceland and 87% of those passengers need to make one or more connections.”

The airline’s Reykjavik-Delhi route, which launches on December 6, will attract a whole new market in the US, he adds.

The route could also even attract UK and European passengers who are unconcerned about changing in Reykjavik if fares are cheap enough. “If you save $100, it works,” he said.

And India is a market ripe for low-cost long-haul, he says.

“Only 50 million of the 1.3 billion Indians have flown. We are offering fares 75-80% less than has previously been in the market, and 20% of foreign students in North America are of Indian origin.”

Wow also plans to launch flights between Iceland and Orlando on December 18. It has built up its transfer hub at Reykjavik to such an extent that only 12% of its passengers now originate in Iceland.

Tracking finances
However, having reported losses this summer, Wow is continuing to try to raise capital. It is hoping to secure at least US$50,000 in consultation with financial firms by issuing bonds, say sources cited by the Icelandic newspaper Morgunblaðið.

The equity of Wow air owner Titan, an investment company owned by Mogensen, amounted to $14 million at the end of June compared with $40 million at the end of 2017.

According to Morgunblaðið, the government is closely tracking the carrier’s financial affairs and has already met to discuss the issue amid the market’s fears that the country’s tourist numbers will fall in the coming months.

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