Icelandic airline Wow Air closes operations as it fails to secure rescue deal
Debt-ridden Wow Air shut operations and grounded planes this morning after a last-minute fight for funding failed, leaving thousands stranded and seeking alternative transport.
The struggling Icelandic airline told customers it has now ceased operation, cancelling all flights.
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While tickets were still being advertised on its website despite the flyer grounding its planes, the site now displays a ‘Systems Maintenance’ message.
Passengers with flight bookings were advised to check with other airlines for so-called rescue fares available at reduced rates.
But the airline advised those seeking refunds to contact their credit card providers, travel insurers or travel agents before contacting Wow.
“Passengers may also be entitled to compensation from Wow Air, including in accordance with European regulation on Air Passenger Rights. In case of a bankruptcy, claims should be filed to the administrator / liquidator,” the flyer said.
Consumer magazine Which advised passengers to seek refunds after the airline was found to be selling tickets despite being on the brink of shutting down.
“Passengers will quite rightly be appalled that Wow Air was still selling tickets right up to the moment it collapsed knowing full well that any tickets sold would likely not be worth the paper they are printed on,” said Rory Boland, Which travel editor.
“You will need to check if you booked your flights as part of a package as this will mean you are ATOL protected and will be entitled to your money back.
“If not, you may still be able to claim through your travel insurance or card issuer but it will depend on your circumstances. You can visit which.co.uk for more advice on your rights.”
Wow Air made a last-ditch bid to secure a cash lifeline this morning but talks collapsed, forcing the airline to close operations.
It issued a fresh travel alert this morning to ground all flights as it said it was finalising a last ditch equity deal to keep it in business.
Wow had promised further details at 9am but the deadline proved optimistic as it shut down operations at 8.18am.
The flyer was in desperate need of cash after grounding flights on Monday too as it struggled to stay afloat.
The business has been on the brink since a mooted takeover from US private equity firm Indigo Partners failed to materialise in recent weeks.
Another possible bidder, rival Icelandair, ruled itself out of the running over the weekend.
Read more: Indigo Partners sets new terms for Icelandic airline Wow Air investment
An industry source told City PM that the major stumbling block to Indigo’s bid for the flyer was Wow boss Skuli Mogensen’s stake in the firm after the deal.
“Skuli wants more than what they [Indigo] are going to give him. It’s the same classic situation that the airline is insolvent. It has no value. For someone to come along and say ‘were going to inject $75m over 10 years, it’s not a lot of money in terms of aviation,” they said.
Today's debacle left thousands of passengers stranded around the world, with Wow Air reportedly owing £150m to lenders.
Iceland's government said four airlines are offering rescue fares for Wow passengers – Icelandair, Easyjet, Norwegian and Wizz Air.
"More information on this has been posted on the webpage of the Icelandic Transport Authority, www.icetra.is along with further information on passenger rights. Icelandic authorities will continue to monitor the availability of rescue fares for Wow passengers scheduled to travel over the next few days."
Founded in 2011 by Icelandic entrepreneur Skuli Mogensen, the flyer first started operating to Europe from Reykjavik, as well as flying to North America.
It has now joined other struggling airlines that have collapsed or are to close to the edge.
Flybe was sold for 1p per share to a Virgin-led consortium this year while Germania has filed for bankruptcy. Ryanair also reported its first quarterly loss in five years last month.