It’s no easy task, getting an out-of-business airline back in the air. But the chairwoman of the rebooted Wow Air insists the low-cost brand’s famous purple planes will be flying between the United States and Iceland again come October.
Michele Ballarin’s ambitious goal has raised eyebrows among industry analysts who question the scant details available about the plan, as well as why anyone would start flying to the North Atlantic just in time for winter. The company’s website is not yet up and running to sell tickets. The two airports involved said there is no new service to announce. And Wow 2, as Ballarin calls it, has not yet confirmed exactly how it will return to the skies so soon.
“It would be — I don’t want to say miraculous — it will be hard,” said Seth Miller, an airline analyst who has written about the plan for the site PaxEx.aero. “Could it happen? Technically yes. Do I expect it to? Not especially.”
Ballarin seems unfazed. According to a 2013 profile in The Washington Post Magazine, she has faced her share of challenges on the domestic and international front, with a professional history that includes time as a congressional candidate, investment banker, CEO of a body armor company, Somali pirate negotiator and government contractor. She chairs a Virginia-based holding company, USAerospace Associates.
She said she started talking to the airline’s founder, Skuli Mogensen, and his team in December as the carrier struggled financially and sought investors to help keep it afloat. Wow ultimately collapsed in late March after an unsustainable expansion, leaving thousands of travelers (including Ballarin) scrambling to make new arrangements.
So when she announced earlier this month that USAerospace had agreed to buy the airline’s assets, it was the continuation of an idea that had formed months earlier. Her interest in Wow Air first became public in July, though a planned deal at the time did not materialize.
“It’s new to everyone who’s reading and talking about this,” she said in an interview Monday. “We’ve been in this now for four quarters. … We’re day-to-day on this, seven days a week.”
According to a written announcement and news conference on Sept. 6 in Iceland, USAerospace Associates reached a final agreement with the trustees of Wow Air’s bankruptcy estate to buy all the airline’s assets. That includes the brand, uniforms, galley carts, reservations system, equipment and other technology. The airline’s planes were leased.
Ballarin, chair of the revived Wow Air, would not say how much the company paid, but she said investors have committed $85 million to the endeavor.
At the event, Ballarin said her company is planning for an inaugural flight in October from Dulles International Airport near Washington, D.C., to Keflavik Airport, about 30 miles from the capital city of Reykjavik. The company will be based in Virginia, with head offices in Reykjavik and a hub in Keflavik, a news release said.
The revived airline will start with two planes, she said, and ultimately grow to 10 to 12. At the time it folded, Wow Air was operating 11 planes, CNBC reported earlier this year.
Ballarin said she thinks it’s the right move not to start flying in the high summer season.
“You want to open conservatively, quietly, smartly, and have your operational efficiencies worked out during the time when you’re not overrun,” she said. “I think it’s precisely the right time to do this.”
Eventually, Ballarin said she wants to go beyond daily Dulles-Keflavik flights, adding other East Coast cities in the United States as well as stops in Europe, such as London, Paris and Rome. Although the news release refers to low-cost carrier operations, Ballarin said she envisions a “premium economy experience” with lounges for all passengers and more nutritious food on flights. She said she wants to “make flying fun again” without overcharging for airfare.
“You can offer better customer experience without breaking the bank,” she said during the news conference. “What’s important is not to get on the aircraft and be asked to pay for water.”
She told online news site Visir earlier this month that she expected an examination of the airline’s technology, including its booking systems, to be done in the next week, and that she hoped to have the website up and running in that time frame to start selling flights.
She said Monday that tests showed the site is functional and trial runs have gone smoothly. Everything could be updated by the end of this week, and she expects people to be able to book tickets once the site is live.
The new Wow Air will start out with U.S. certification, she said. The U.S. Department of Transportation has not received an application yet from a Wow successor, though experts said the company could easily contract an airline that already has certification to operate flights under the Wow Air name.
Ballarin said the operations team had worked all weekend on that question.
“We want to be able to start next month, and whichever model enables us to do that seamlessly and from a very strong start position is the model that they’ll select,” she said. “And I’m leaving that to the operations folks.”
Regardless of how the airline starts flying again, Ballarin said the goal is to get its own certificate in the United States and to apply for an Icelandic operating certificate down the line.
Spokespeople for airports both in the United States and Iceland said there are no firm plans in place for flights yet, though Ballarin said Monday in an interview that the company had requested a gate at Dulles two weeks ago and in Keflavik last week.
“While the team at Washington Dulles International Airport held an initial meeting last month with Ms. Ballarin and her associates regarding the process for establishing air service at the airport, there are currently no flights scheduled with WOW Airlines out of Dulles International and no new air service to announce,” Christina Saull, a spokeswoman for the Metropolitan Washington Airports Authority, said in an email.
Gudjon Helgason, a spokesman for Keflavik Airport operator Isavia, said his company did not have any information on Wow Air’s plans beyond what has been reported. “We welcome any airline that is interested in operating at and flying to and from Keflavik Airport,” he said in an email.
Helgason said a third party, Nordic Airport Coordination, handles requests for airport slots and takeoff and landing times for the airport. A representative for that group, Frank Holton, said he has heard only rumors.
“I have heard absolutely nothing from any new operator,” he wrote in an email. “But I have heard from many journalists.”
Iceland’s robust tourism growth had already slowed by 2018. But this year, the numbers are in the negative. The New York Times reported recently that international tourism numbers are “on track” to fall 16 percent this year. “In retrospect, it was probably not a fantastic idea to leave Iceland’s economic fortunes tethered to an airline called WOW,” the Times reported.
Ballarin wants to deliver some of those visitors back, as well as jobs that were lost when the airline folded. “How can we fly without those beautiful flight attendants?” she said during the news conference. She sees potential for a cargo business as well and hopes to bring Icelandic fish, chocolate, beauty products and other goods to the United States.
Still, industry watchers are not convinced that Wow 2 will succeed where Wow 1 failed. Robert Mann, an analyst and former airline executive, said the discussion he has heard thus far about the new Wow Air is “just a little bit underspecific to be legitimate at this stage.”
For consumers wondering whether to trust the airline, Mann said his advice would be: “Wait till it comes back, and then decide. There’s no rush.”
Mogensen, Wow Air’s founder, told the Financial Times after the collapse that trying to make the airline a global business was “fatal." He said the airline carried too much debt, struggled with fuel price increases, and made an ill-advised decision to order larger, more costly jets for long-haul flights.
Ballarin said she has learned from some of her predecessor’s mistakes. She plans to grow conservatively, hedge against rising fuel prices and use tags that allow passengers to track their bags, avoiding penalties for lost or delayed luggage.
“The restart is far easier than a start-up from scratch,” she said. “There will always be Doubting Thomases. At the end of the day, I will be the most proud of all the gals lined up there at the gate to see that purple airplane sitting there.”