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Often, when I ask an airline executive about a possible merger, I get a non-answer, or a lukewarm denial. It’s part of the corporate dance.
But I recently asked Wow Air’s CEO, Skuli Mogensen, whether he would be open to merging with Iceland’s other airline, Icelandair. The carriers have different models — Icelandair is full-service — and different corporate cultures. But they share the same hub, and while Iceland is a hot tourist destination with a favorable North Atlantic geographic position, Reykjavik may not need two international airlines flying similar routes.
“It’s an obvious question,” Mogensen told me at the Aviation Festival in London. “Clearly we could rationalize the network and leverage the situation a lot better — a no-brainer. Will it ever happen? I am not sure.”
Wow Air probably needs some change to improve its fortune. While customers often like it for its cheap one-stop transatlantic fares, if not its customer service, Wow is losing money, according to data leaked from a presentation to prospective investors. Mogensen told me he’s hopeful a proposed bond offering could raise $50 to $100 million, bridging the gap until the carrier’s planned initial public offering, probably within two years.
But that could be wishful thinking. It might make more sense for another airline to acquire Wow, particularly since some other carriers see it as a nuisance and may be willing to pay a premium to put it out of business. Though Icelandair seems like a logical option, a few European airlines may also be interested. Several find Wow irritating and want to bulk up their long-haul, low-cost offerings.
What do you think? Let me know via email or Twitter.
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Airlines’ Latest Customer Shakedown? Making You Bid for a Seat Upgrade: Let me channel my inner Scott Kirby. You may remember I interviewed United’s president last month, and he told me some airlines charge more for certain seats because they’re more valuable to customers. Passengers may not like it, but the rationale makes sense. So I find this article from Vox to be a little lazy. It’s not a “shakedown” for airlines to sell their most coveted seats at a premium. It’s just business.
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Skift Senior Aviation Business Editor Brian Sumers [firstname.lastname@example.org] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send him an email or tweet him.