Icelandic airline Wow Air aims to raise between $200 and $300 million in an IPO, which is expected to take place within 18 months.
This was stated by the company's CEO and main owner, Skuli Mogensen, to the Financial Times.
Skuli Mogensen expects to need to sell less than half of the company to raise the desired amount.
Wow Air, which sells low-cost tickets to and from the United States via its hub in Iceland, has struggled financially in recent years. In 2017, it posted a pre-tax loss of $27.5 million on revenue of $486 million, and this year it expects to lose $6 million. However, the company's CEO is optimistic about 2019, when he believes the company will turn a profit and have revenue of $830-840 million.
Skuli Mogensen admits to the newspaper that Wow Air has been poor at keeping its costs down. For example, the company has chosen not to hedge its jet fuel costs, which at the end of August cost $92 per barrel – an increase of about 25 percent compared to a year earlier. However, according to the CEO, the company's main focus is to increase ancillary revenues, such as fees for extra legroom or for food on board. Wow Air's average ancillary revenue per passenger is currently $57, an increase from $42 in January 2017.
Wow Air also has some catching up to do in terms of customer satisfaction. The service Airhelp, whose business idea is to help travelers get compensation for delayed or canceled flights, ranks it at the bottom of 72 airlines in terms of punctuality, service and handling of compensation claims.
”"We have to get better. It is obviously in our interest to resolve this," Skuli Mogensen told the CNBC television channel in June about the jumbo placement.
Source: Nyhetsbyrån Direkt
