What's your opinion of investing in an airline? Margins are pretty damn low, and it seems like everyone who starts one is getting crushed.
Let's take a look at what happened to WOW air last week.
Newsletter from The Water Coolest - Not Up in Here
Budget airlines have had a rough go at it lately. Even if the low fare operators can afford Boeing safety upgrades, they face headwinds in the form of fuel prices and stiff competition.
The latest victim of an ongoing European fare-war is WOW Air, an Iceland-based budget airline. WOW isn't alone, with eight European airlines failing since the summer, but it does seem to have a flair for the dramatic that its competition lacks.....
Not unlike the AAF, WOW's leadership was scrambling to secure funding ahead of today's news from Icelandair and PE shop Indigo Partners. The airline had already delayed the inevitable by convincing bondholders to convert debt into equity but alas it was leasing companies which pulled the plug on WOW's big old jet airliners that appears to have been the final nail in the coffin.
What is your take on this, and if you had to invest in one, what would the ideal situation be?