Iceland's WOW Air budget carrier collapses, cancels all flights

AFP

2019/03/28 | 290 words | AEROCONTACT | AIR TRANSPORT
Iceland's WOW Air budget carrier collapses, cancels all flights © Le Journal de l'Aviation - All rights reserved

Iceland's budget carrier WOW Air said it had ceased operations and cancelled all flights on Thursday, potentially stranding thousands of passengers.

The collapse of the troubled airline, which transports more than a third of those travelling to Iceland, comes after buyout talks with rival Icelandair collapsed earlier this week.

"All WOW Air flights have been cancelled. Passengers are advised to check available flights with other airlines," the carrier said in a statement.

"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."

WOW Air, founded in 2011, exploited Iceland's location in the middle of the North Atlantic to offer a low-cost service between Europe and North America as well as tapping into a tourist boom to the volcanic island.

However it had flown into financial trouble in recent years due to heightened competition and rising fuel prices, and had been searching for an investor for months.

On Monday WOW Air said it was in talks to restructure its debt with its creditors after Icelandair ended brief negotiations over buying a stake in the no-frills airline.

WOW Air was left needing $42 million to save the company, according to the Frettabladid newspaper.

The privately-owned airline has undergone major restructuring after posting a pre-tax loss of almost $42 million for the first nine months of 2018.

It has reduced its fleet from 20 to 11 aircraft, eliminating several destinations, including those to the US, and cutting 111 full-time jobs.

A report by a governmental work group has warned that a WOW Air bankruptcy would lead to a drop in Iceland's gross domestic product, a drop in the value of the krona and rising inflation.


Aviation and aerospace newsletter

Sign up for free
to the weekly newsletter!

In the same theme:


2019/02/18 | AEROCONTACT | AIR TRANSPORT

British regional airline flybmi announced on Saturday it had ceased operations and was filing for administration, blaming spikes in fuel and carbon costs and uncertain...


2019/01/04 | AEROCONTACT | AIR TRANSPORT

Britain's two biggest airports, Heathrow and Gatwick, are investing in anti-drone technology following severe disruption at Gatwick caused by drone sightings in th...


2018/12/19 | AEROCONTACT | AIR TRANSPORT

British Airways will resume flights to Pakistan next summer, the carrier announced Tuesday, in a major vote of confidence from a Western airline a decade after suspend...

See also:


2019/04/10 | LE JOURNAL DE L'AVIATION | AIR TRANSPORT

French opposition MPs and senators claimed a victory for democracy Wednesday after using a little-known constitutional article to try to trigger a referendum on the g...


2019/03/27 | LE JOURNAL DE L'AVIATION | AIR TRANSPORT

Southwest Airlines trimmed its revenue estimate Wednesday, citing flight cancellations due to the Boeing 737 MAX grounding among key factors dragging on earnings.Sout...


Cathay Pacific to buy budget airline HK Express for $628 mn
2019/03/27 | LE JOURNAL DE L'AVIATION | AIR TRANSPORT

Hong Kong flag carrier Cathay Pacific said on Wednesday it will buy budget airline HK Express for more than US$600 million as it moves to counter competition from the...