The WOW/PLAY saga continues, maybe?

In true Scandinavian Viking tradition, PLAY – once known as WOW and briefly as WAB, seems to have hit a little bit of an issue. The proverbial problem for all airlines start ups – well all airlines really – money.

It seems despite protestations to the contrary, to lack enough of it to get going – $14,000,000 of it to be precise.

Which is a bit odd because it claimed only two weeks ago to have as much as $44m from the wife of the late original founder of RyanAir via Athene Capital.

The problem seems to be that the way the airline is being staked – with 50% going to work the force and some 20% to Icelandic investors only, Athene Capital gets a 10% stake (which doesn’t match its investment level as most of it’s a loan), it leaves only 20% – and $14m is a huge stake to pay for a non-existent airline with no track record – and get just 20% of it. Oddly enough investors are hard to find in such a volatile business.

Investors are also worried about the management – too many are regarded as ex-WOW including the former Chief Financial Officer who was in charge as its finances led it to bankruptcy. Not the most encouraging individual to help run a new airline.

Forecasts of $70m in profits in the first quarter are also worrying many as being not just totally unrealistic but incredibly naive: the last thing anyone needs as an investor.

There’s a significant feeling in Iceland that while the new airline is in principle a good idea, it’s not a good investment. People had their fingers badly burned in the hype of WOW. A little circumspection seems more than justified the second time around.

Meanwhile plans are still going ahead to start ticket sales in a few days time and flights in December.

Would you invest, would you buy a ticket? Some 40,000 people have out their name down to get tickets – 1,000 free ones are being given away. As of yet the airline doesn’t even have an AOC never mind guaranteed slots at airports.

It’s going to be interesting to watch where this goes!