Liquidators of Wow Air find inconsistencies

The resurrection of Wow Air is taking longer than planned. Originally, planes of the Icelandic airline were supposed to take off again last October between Reykjavík-Keflavik and Washington Dulles. The American airline US Aerospace Associates is driving the plans and bought up the Wow assets from the bankruptcy estate.

In October, however, the launch had to be postponed until December. However, the purple planes are still not in the air today. Now, US Aerospace owner Michele Roosevelt Edwards (formerly Michele Ballarin) is again taking the floor regarding the relaunch. On Linkedin she announces that the new Wow Air will start its first flights «in a few weeks».

Old Wow Air in the headlines

However, the new Wow boss does not disclose any further information. It is not known whether the new-old airline will continue to operate flights to Washington after the restart. It is also unclear which planes it will be using.

While much remains in the dark during the new start, the old Wow Air – legally independent of the new one – is making headlines. The liquidators have reported possible violations of the law from 2018 to the Icelandic public prosecutor’s office. According to Rúv news agency, a document from an auditing firm is supposed to reveal inconsistencies in the issuance of bonds.

Strange bond issuing

By issuing the securities, Wow Air raised 7 billion crowns or the equivalent of 50 million euros. According to the document, the airline used more than a third of the sum to repay debts to parties that had previously bought exactly these bonds, including the Arion bank. The airline and its then CEO Skúli Mogensen had also bought bonds themselves.

Mogensen’s bonds are said to have been fully secured by Arion loans. It is not clear whether other buyers of the Wow-Air bonds knew about this. However, they could have been deceived by the measures by suggesting that there was a great demand for the bond issue. Arion also promised to buy bonds if Wow Air would repay an overdraft in return, said Rúv.

Apartment wrongly declared

Inconsistencies are also said to have occurred in a property owned by Wow Air. The airline paid a total of almost 370,000 euros for the employee apartment in London. According to the auditing company, however, there are indications that Mogensen used the apartment for himself.