Wow Air: Thousands stranded as budget airline ceases operation

Airline has hundreds of thousands of forward bookings for the summer

Simon Calder
Travel Correspondent
Thursday 28 March 2019 08:42 GMT
Wow Air 'ceases operations' and cancels all flights

Wow Air has closed down, leaving thousands of passengers stranded – and wrecking the travel plans of hundreds of thousands more.

The troubled Icelandic airline was heavily in debt and has been seeking a backer for months. Talks with a US financier and the rival carrier, Icelandair, broke down in the past few days.

As dawn broke at Keflavik airport outside Reykjavik, the airline announced it was “in the final stages of finalising equity raise with a group of investors”.

All of Thursday’s flights were cancelled “until documentation with all parties involved have been finalised”.

But that was an empty promise; by 8.18am GMT the airline announced: “End of Operation of Wow Air.

“Wow Air has ceased operation. All flights have been cancelled.

“Passengers are advised to check available flights with other airlines.

“Some airlines may offer flights at a reduced rate, so-called rescue fares, in light of the circumstances. Information on those airlines will be published, when it becomes available.

“Passengers whose ticket was paid with a credit card are advised to contact their credit card company to check whether a refund of the ticket cost will be issued.

“Passengers who bought their ticket from a European travel agent (within the European Economic Area) as a part of a package tour (a package which includes flights and accommodation or other services) are protected by the Package Travel Directive. Those passengers are advised to contact their travel agent to arrange an alternative flight.

“Passengers who may have bought travel protection, or those passengers whose credit card terms may include such protection, may be entitled to claim compensation and assistance due to delays or travel disruption. However, such compensation is often limited.

“In case of a bankruptcy, claims should be filed to the administrator/liquidator.”

The airline may have some value in the slots that it owns, but its brand value has collapsed over the past days and weeks.

Ground stop: departure screen at Reykjavik’s international airport
Ground stop: departure screen at Reykjavik’s international airport (Isavia)

Wow Air is believed to owe around £150m.

The Icelandic budget airline was founded by an Icelandic entrepreneur, Skúli Mogensen. It first flew to Paris on 31 May 2012 and later that year took over an existing airline, Iceland Express.

The carrier employed around 1,000 people and flies an all-Airbus fleet. In 2018 it carried 3.5 million passengers.

The main business model was to connect Europe and North America through its hub at Reykjavik, in competition with the long-standing incumbent, Icelandair.

Route map: the Wow Air network
Route map: the Wow Air network (Wow Air)

Another rival, Primera Air, went bust in 2018.

Thousands of passengers are on the wrong side of the Atlantic. From Baltimore-Washington International, Suheradi tweeted: “My flight out of BWI was delayed twice for a total of 5 hours and then just cancelled.

Many passengers are stranded without any place to stay tonight or any idea of what’s going on.”

Wow Air currently has flights scheduled between Gatwick and Reykjavik, with services due to switch to Stansted on Sunday. Edinburgh is another summer destination.

Over the past few days a one-way flight from Stansted to Reykjavik was priced at £756. On the same day, easyJet has a flight from Luton to the Icelandic capital for £57.

Increasing fares to astronomic levels to deter bookings has been used as a technique in the past by failing airlines, notably Monarch in 2017.

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Passengers have a wide range of rights under EU legislation, which Iceland also abides by, but if an airline fails these entitlements become academic.

Previous passengers who have claims against Wow Air for previous delays and cancellations, and the costs associated with them, are being told: “Your claim is with the accounting waiting to be finalised.

“Due to unforeseen circumstances, the payment process will, unfortunately, take longer than expected.

“We can assure you that your claim is still active and will be processed as quickly as possible.”

Laura de Beus tweeted: “I see that you have been ignoring me and taking that time to respond to new customers that you have disappointed.

“Please just handle my payment before your company falls. You owe me €2,000.”

Wow Air built its UK-Iceland-US business partly through fake claims about its fares, asserting it would fly passengers from Gatwick via Reykjavik to New York for £99 when the lowest fare was actually £170.

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