Wow Air spent six years drawing shoe-string travelers aboard a growing fleet of magenta jets with fares that sometimes dipped below $100 for a flight across the Atlantic.
Founded in 2012 and owned by Icelandic entrepreneur Skuli Mogensen, Wow has watched its rapid growth backfire in recent years. Customer service complaints piled up. It expanded too rapidly and had to fill planes with ever-more expensive fuel, sapping its cash. Things unraveled after aircraft leasing companies asked for stricter payment terms for planes in September. Wow posted losses for the past two years. The situation became more dire last year when rival Icelandair, which looked to be a savior for Wow, backed away from a takeover offer.
Enter 81-year-old airline investor Bill Franke.
Franke, a lawyer by training, is managing partner at private equity firm Indigo Partners, which owns Frontier Airlines. He’s a long-time proponent of low, bare-bones air fares and fees for everything else.
Franke has earned a reputation for aggressive cost-cutting and a track record for turning around ailing airlines over his more than two-decade career in airlines. Late last year, Indigo agreed to buy a 49 percent stake of Wow for up to $75 million — a deal Franke expects to close as early as this quarter.