Wow Air plans listing but leaves airport unpaid

Iceland’s Wow Air plans to raise up to $300 million through an initial public offering in the next 18 months but is struggling to pay the operating charges at its home airport.

Wow Air chief executive and owner Skuli Mogensen revealed his intention to raise funds by listing shares in less than half the airline while retain a controlling stake this week.

Mogensen conceded the carrier, which he founded in 2011, continues to lose money.

Wow offers cheap flights between Europe and the US via Iceland’s Keflavik airport.

However, Icelandic newspaper Morgunbladet reported Wow owes two billion Icelandic krona (€16 million) to airport operator Isavia in unpaid charges at Keflavik.

It reported Wow has not paid the charges at all this year, with Isavia’s half-year accounts listing the debt.

Wow Air reported a $27.5 million (€31 million) loss in 2017 and expects to lose money again in the current financial year, although Mogensen forecasts a profit in 2019.

Yet the airline remains unhedged on fuel as oil prices continue to rise and Mogensen said: “Fuel has clearly worked against us. We are not hedged [but] we are reconsidering that policy.”

The airline has the backing of Stockholm-based investment bank Pareto Securities which has undertaken to issue bonds to investors on Wow’s behalf.