good riddance. flied with them once. the seat was worse than those outdoors metal folding and stackable seats you see in very cheap beach front places. no padding. absolutely no reclining.
it was a criminal lack of basic ergonomics for the tens of hours you seat on them.
It would have been nice if they had shut down more gracefully, though, since there's currently hundreds (if not thousands) of people stranded across the globe…
By doing a graceful shutdown, they will take much bigger losses in the last few weeks of trading, which is the directors not fulfilling their duty to shareholders.
They're still sprung, just not very much because every inch of springyness in the back is an inch of space that could have been used to squeeze another row of seats in.
Must have been pretty dramatic if they suddenly canceled all flights rather than winding down the company. The article doesn't exactly make that clear.
It was not abrupt. Things had been bad for them for the last year or so. WOW worked (publicly) for the past five months to find a new source of funding and restructure its operations, hoping to continue flights.
* In November 2018 it looked like Icelandair would acquire WOW Air, though that deal ended up falling through
* After that, Indigo Partners (private equity group which has invested in quite a few airlines) signed an agreement in principle to invest in WOW Air; just a few days ago it was announced that this deal fell through
* Earlier this month, WOW Air announced that they were back in discussions with Icelandair, and that the parties hoped to conclude negotiations by Monday, March 25, 2019
* On Sunday Icelandair announced that they had concluded talks with WOW Air, and didn’t intend to move forward
* Then things got really bad, as one of their planes was allegedly repossessed in Montreal
WOW Air bondholders approved a plan to convert their bonds into equity, but that only takes you so far
On a related note, WOW Air is the third European airline to halt operations this year, joining Flybmi and Germania.
Just as a note, Indigo Partners is an American private equity firm which has controlling stakes in Frontier Airlines and Chilean low cost carrier JetSmart and stakes in Wizz Air and Volaris, which are major low cost carriers in Eastern Europe and Mexico respectively.
Just a reminder: when you buy something from a company that they don't deliver immediately, you're one of its creditors. If they declare bankruptcy, unless you're in the 90-day credit card chargeback window (or have some other protection), you get in line with the other creditors. This goes for gift cards, too.
In general, be careful buying things more than 90 days out because of this, and be careful when you effectively "lend" money to a struggling company.
Even if you are one of the creditors. If the company is bankrupt the biggest creditors usually get paid first. In the case of Wow Air, that's most likely the companies that leased them the planes. Many creditors have to be statisfied before it's your turn as an invidiual.
Legally, you are indeed a creditor and you deserve to be paid back if possible. In reality, that rarely happens.
Having different classes of creditor ranked seems like almost fraud to me.
A bank who has a higher priority with bankruptcy proceedings has a strong incentive to keep loaning out cash to the failing business at ever worse rates until just the moment that the assets no longer cover their outlay. At that point, they make the company bankrupt with the full knowledge all the other creditors will get nothing and they'll get their full capital back.
You make a interesting point. I wonder if we've actually seen this in practice anywhere. Perhaps to avoid this, you receive a portion of the amount paid back to creditors equal to your percentage of debt owed?
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[ 3.1 ms ] story [ 61.0 ms ] threadit was a criminal lack of basic ergonomics for the tens of hours you seat on them.
By doing a graceful shutdown, they will take much bigger losses in the last few weeks of trading, which is the directors not fulfilling their duty to shareholders.
If you want comfort, go with a more premium airline.
* In November 2018 it looked like Icelandair would acquire WOW Air, though that deal ended up falling through
* After that, Indigo Partners (private equity group which has invested in quite a few airlines) signed an agreement in principle to invest in WOW Air; just a few days ago it was announced that this deal fell through
* Earlier this month, WOW Air announced that they were back in discussions with Icelandair, and that the parties hoped to conclude negotiations by Monday, March 25, 2019
* On Sunday Icelandair announced that they had concluded talks with WOW Air, and didn’t intend to move forward
* Then things got really bad, as one of their planes was allegedly repossessed in Montreal
WOW Air bondholders approved a plan to convert their bonds into equity, but that only takes you so far
On a related note, WOW Air is the third European airline to halt operations this year, joining Flybmi and Germania.
The Indian low cost carrier Indigo is unrelated.
In general, be careful buying things more than 90 days out because of this, and be careful when you effectively "lend" money to a struggling company.
Even if you are one of the creditors. If the company is bankrupt the biggest creditors usually get paid first. In the case of Wow Air, that's most likely the companies that leased them the planes. Many creditors have to be statisfied before it's your turn as an invidiual.
Legally, you are indeed a creditor and you deserve to be paid back if possible. In reality, that rarely happens.
A bank who has a higher priority with bankruptcy proceedings has a strong incentive to keep loaning out cash to the failing business at ever worse rates until just the moment that the assets no longer cover their outlay. At that point, they make the company bankrupt with the full knowledge all the other creditors will get nothing and they'll get their full capital back.
In bankruptcy, the size of the claim doesn't determine its priority.
The law determines claim priority, and the company doesn't have much discretion.
First in line are secured creditors who lent against collateral. In Wow's case, the airplanes collateralize most of the debt.
Then comes employees, taxes and bank loans.
After that comes unsecured bonds.
Next are unsecured creditors with unpaid invoices.
After that is preferred stock.
And if there is anything left over, it goes to common shareholders.