WOW Air is no more. After multiple failed attempts to secure additional funding to continue operations the Icelandic LCC formally ceased operations Thursday morning. All flights are cancelled and passengers are being directed to contact their travel agent, credit card company or travel insurance provider for refunds and rebookings.
In addition to those options, some other airlines have stepped in with rescue flights to help travelers get home. Icelandair has the most overlap with the WOW network and is offering support for passengers stranded in a dozen European cities or five in North America. Those travelers can access seats on a space-available basis from $60++ from Iceland to the rest of Europe and from $100++ for North American destinations.
WizzAir is also offering rescue flights from Keflavik to London or Warsaw, though pricing and booking details are less clear.
Aer Lingus and Virgin Atlantic are also offering seats on a space-available basis.
WOW Air is the third European airline to halt operations this year, joining Flybmi and Germania. In late 2018 Primera Air similarly found itself on the short end of the balance sheet after trying to rapidly expand in the Transatlantic LCC market. A year prior Air Berlin closed up shop, also having tried to expand rapidly and diversify its fleet and operations with a mix of short-haul and long-haul services.
In addition to the passengers stranded across Europe and North America the company’s collapse affects some 1,500 employees, mostly in Iceland. Against a population of 350,000 that is an outsized impact. The move will also reduce tourism lift into Iceland overall, though that may be a small blessing in disguise. The country’s ability to handle the continued growth of visitors has been in question for a few years now.
WOW worked (publicly) for the past five months to find a new source of funding and restructure its operations, hoping to continue flights. Competing neighbor Icelandair was involved in two rounds of discussions to buy out the company; both came up short. Airline investment group Indigo Partners also held long-running talks before eventually walking away. Bond debt was part of the trouble at one point but that was eventually cleared.
And, ultimately, no one could come up with a plan for the operation that made financial sense.
A great product, but…
WOW Air was honored as CAPA’s LCC of the year in November, shortly after the unraveling began.
The Low Cost Airline of the Year Award is for the low cost or hybrid airline that has been the biggest standout strategically, has established itself as a leader, has been most innovative, and provided a benchmark for others to follow.
In many ways the award qualifications were legit. The on-board product was pretty good and the marketing proved spectacular. Campaign after campaign delivered high returns on earned media and brand recognition.
But that never translated into a premium fare yield for the carrier. Or even a reasonable fare yield. Passengers seeking out the cheapest option were all too happy to buy those flights, but by the time the fares inched anywhere close to covering costs passengers would skip the stop in Iceland and just get to their destination.
And so we say goodbye to the bright pink planes and the fun marketing promotions. It sure was fun for a few years.
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