WOW air Collapses, All Flights Canceled Effective Immediately

Icelandic ultra-low-cost carrier WOW air announced Thursday that it has ceased operations, with any remaining flights canceled immediately. The airline issued a statement from the Icelandic Transport Authority recommending that passengers affected by the airline's collapse begin exploring the possibility of flights with another carrier.

WOW air's collapse follows months of financial difficulties and strategic indecision, including two failed takeovers.

[Find more of our ongoing coverage of WOW Air's collapse, and what affected passengers can do about it, here.]

WOW air began to experience financial troubles in 2018. Following what appeared to be a successful summer travel season with rapid expansion, the airline began to end service to numerous destinations throughout North America and Europe. Speculation of financial troubles at WOW air was sparked in October 2018, when the airline abruptly announced that it would end service to three North American markets just months after commencing service.

Routes were announced and then canceled quickly, suggesting an undeveloped long-term strategy given the traditionally long lead times for new routes to be successful.

How WOW Collapsed

WOW air's financial difficulties were confirmed in November 2018 when the airline announced that it was in talks with rival Icelandair. The two airlines had reportedly reached a deal for Icelandair to take over WOW air, but the deal fell through later that month.

WOW air then released a letter to bondholders that painted a very bleak picture. According to the letter, written by WOW air's CEO, bad publicity had created a domino effect for the airline.

In December 2018, WOW air announced a restructuring plan that included returning roughly half of its fleet to lessors and cutting additional routes. Later that same month, WOW air appeared to have found yet another savior when Indigo Partners, which has a controlling share in US carrier Frontier, stepped in to discuss the possibility of acquiring WOW.

]WOW air Airbus A320 Cabin (Image by Max Prosperi/The Points Guy)Though WOW air continued to stay afloat for almost three full months in 2019, it was just announced on March 22 that WOW air had failed to reach an agreement with Indigo Partners. Earlier this week, it was reported that one of WOW air's Airbus A321s had been repossessed following a flight to Montreal after the airline failed to make lease payments.

Yet, once more, it appeared WOW air might survive when the airline announced Wednesday that it had struck a deal with bondholders to convert the airline's debt into equity. The sudden decision to cease operations shows just how critical cash flow is to an emerging airline.

On Wednesday, only a handful of WOW air flights had departed bound for the United States and Canada, with the final flight landing in Detroit (DTW). The airline's return flights to Iceland were canceled, signaling that a collapse might be imminent. The airline confirmed that all operations had ceased in a statement released at 9 AM Iceland time (5 AM EST).

Now, passengers who had tickets on WOW air are left to find other flights.

What Passengers Affected By WOW Air's Collapse Can Do Now

WOW air is working with Icelandic authorities. The Transport Authority said on its website and in a press release that "Passengers are advised to explore the possibility of flight with other carriers." The Transport Authority also noted that "In this situation some airlines may offer passenger assistance in the form of a rescue ticket." If you have upcoming travel booked on WOW, we also recommend looking at how credit card travel protections could help you.

Fellow Icelandic carrier Icelandair has quickly stepped in to assist passengers, offering discounted economy fares for affected passengers holding a return WOW air ticket for travel between 28 March and 11 April 2019 for flights to:

• Europe for $60 per flight plus fees and taxes (destinations are Amsterdam, Berlin, Brussel, Copenhagen, Dublin, Frankfurt, Glasgow, Hamburg, Helsinki, London, Oslo and Paris)
• North America for $100 per flight plus fees and taxes (to Boston, Edmonton, New York, Toronto and Washington)

Anyone wishing to take advantage of this offer should complete the special online form here first. Once this is completed passengers can then contact Icelandair directly via phone, Facebook Messenger or Twitter to expedite the process. Expect long wait times to their call centers, so social media may be a faster method of contact. As this deal is limited to return flights commencing from today onwards, those who are part-way through a trip would appear to unfortunately be ineligible.

Passengers who had tickets for flights on WOW air are encouraged to consult Iceland's Transport Authority's website for additional information. To summarize:

• Passengers who booked their ticket with a credit card should immediately call the credit card issuer to ensure a refund is promptly issued.
• Passengers who booked a flight with WOW air via a third-party such as a tour operating should reach out to the third-party to begin the process of receiving a refund.

Either method may require a 'negative response' letter from the airline confirming operations have ceased. Obtaining this may take some time given the volume of affected passengers so any passengers should commence this process as soon as possible. Expect long wait times if you are calling WOW air or attempting to contact them via social media.

Iceland's Transport Authority also notes that passengers may be eligible to file a claim against WOW air. This means that, in accordance with European law, some passengers may be eligible to receive compensation from WOW air. Again, this may take quite some time noting their cash difficulties.

For passengers affected by WOW air's collapse, the airline and the Icelandic Transport Authority is recommending that passengers consult the Transport Authority website, get more information at airport ticket counters, and follow WOW air's official website.