Budget Airline Collapses, Strands Passengers Globally

Icelandic budget airline WOW Air abruptly collapsed on Thursday, March 28, grounding flights mid-morning and leaving thousands of passengers stranded on both sides of the Atlantic. The financial collapse comes after failed talks by WOW Air CEO Skúli Mogensen to secure additional funding for the airline throughout early Thursday morning.

Passengers were left stranded without connection flights throughout Europe and the U.S., as flights were initially severely delayed and ultimately cancelled. Frustrations abounded as airport authorities struggled to obtain information over the sudden cancellations, with many WOW customers being informed of the airline’s collapse via social media. Customers were quick to vent their anger on social media platforms, with many travelers posting videos of the chaotic scenes at boarding gates.

The airline offered little information to customers, releasing a statement advising customers to seek “rescue fares” from airlines flying to their final destinations. European and American airlines, including AerLingus, Norweigan Air, Iceland Air, United Airlines, and others subsequently offered discounted fares to affected passengers in the wake of the turmoil.

Mogensen and WOW Air management has subsequently received criticism for the handling of the collapse, principally for selling flight tickets after the grounding of aircraft and the lack of a warning for passengers affected by the termination of services. Statements by Mogensen claim that the CEO “had faith until 7 a.m.” on Thursday preceding the order to immediately cease operations.

WOW Air offered lucrative flights from locations in the U.S. to Europe at rock-bottom prices, with round-trip flights often sold below $200. WOW Air flights featured layovers in the Icelandic capital of Reykjavik, promoting tourism growth in the northern nation. Financial troubles at WOW Air resulted in the airline seeking a merger with Iceland Air, another budget-friendly airline located in Reykjavik that often includes stopovers in the city. Talks collapsed due to Iceland Air being unwilling to accept WOW Air financial burdens. WOW’s dire fiscal situation became more pronounced in recent days as fuel prices continue to rise globally. Budget airlines like WOW Air often are able to offer low prices by keeping profit margins quite small. Consequently, these airlines are very susceptible to changes in fuel prices, which quickly eat into their bottom line. A dip in Icelandic tourism, which had peaked in recent years, is also speculated as to contributing to the financial collapse. WOW Air is the second European budget airline to collapse in less than six months, with Danish Primera Air collapsing in October of 2018.

WOW Air is encouraging affected customers who purchased tickets via a credit card to contact their credit card company for a potential or partial refund. Additionally, those who purchased travel insurance are asked to contact their insurance provider directly for compensation inquires. WOW Air was founded in 2011 and regularly offered transatlantic flights to Europe from BWI airport. Information for affected passengers can be found updated online at the website for the Icelandic Transport Authority at www.icetra.is.