Wow Air sets course for $300m IPO

Iceland’s Wow Air is aiming to raise $200m-$300m in an IPO of the low-cost, long-haul airline within 18 months, according to its CE and owner. Skuli Mogensen, who founded Wow in 2011, said he would expect to raise that figure by selling less than half of the company, but he did not give a valuation for the whole business. The airline, which offers cheap flights to the US via its Iceland hub, has had a difficult couple of years: it lost $27.5m before tax in 2017 with revenue of $486m and expects to lose $6m this year. Mogensen said he hoped it would return to profit in 2019 with revenue of $830m-$840m. This is in contrast to the rest of the industry, which had record profits in 2017 thanks in part to low jet fuel prices. Mogensen conceded that the airline had not managed to keep down its costs: “Fuel clearly has worked against us, we’re not hedged. We are reconsidering that policy.” At the end of August jet fuel had risen to $92 a barrel, up a quarter compared with a year ago. But he said his focus was on raising ancillary revenues— such as charges for extra legroom to in-flight meals — which stood at $57 a person, up from $42 in January 2017. “The margin on that kind of growth is 95% versus network growth. This is our way of competing efficiently against the largest carriers,” he said. Mogensen added that he wanted to increase the figure to $65 in the next year.<br/>