Skúli Mogensen, former CEO of bankrupt WOW Air, hopes to perform an Easter Miracle on the airline which went bust just one week ago. Mogensen is now asking for up to US$40 million from anyone gullible enough to finance the project.
According to an investor presentation, the new company would buy up WOW air’s remaining assets, including the WOW brand, and would be flying from Keflavík Airport to 13 destinations by the end of June this year.
An investor presentation dated April 3, that’s since been leaked, outlines the prospective company’s plans though to 2021.
The presentation states that:
- A new airline would first take on lease projects for larger European airlines, starting operations almost immediately, ideally by end of June.
- It would be flying to destinations in Europe and North America, such as London, Paris, Amsterdam, Barcelona, New York, and Boston. The company expects to be operating seven aircraft by the spring of 2020 and ten by 2021.
Morgensen and other key figures involved in the company’s establishment would own a 51% share in the new airline, all other investors would have a 49% stake. That gives them a controlling stake in the business and an open ended opportunity to do what they want, virtually regardless of the remaining shareholders. There is something of a trust issue here. Is anyone seriously willing to give a man who couldn’t even sell his airline to a willing investor not once but three times, prepared to be any more flexible or hands-off when needed a second time around?
They expect liquidity to be positive in the second quarter of next year. The investor presentation specifically states that the company’s CEO would take a 30% pay cut in the first year of operations. But from what? His previous salary at WOW? He currently has no salary, so a 30% cut of nothing is nothing. If He’d have said “I’ll work for a year for nothing until its back on its feet”…that would have shown some commitment.
Mogensen would fill the position of CEO at the new company, and bring with him all the other people who failed to make it work the first time round. The investor presentation states that the team has “learned its lesson” and the new airline would stick to purely low-cost policies in order to avoid the mistakes of the past. Why didn’t it do that first time round?
Really? Learned its lesson? Time after time they were given red flags at WOW and time after time they ignored them. This is a team who failed and they have no credibility right now. Invest in this at your peril.