Icelandic budget airline WOW Air abruptly closed up shop on Thursday, stranding thousands of passengers including Canadians across Europe and North America.
In a statement on its website, the airline said it has ceased operations, and as a result “all WOW Air flights have been cancelled.”
The airline encouraged customers who had paid for their ticket with a credit card to check whether the credit card company would refund the price of their ticket, and directed passengers to other airlines to try to find alternative routes to their destinations.
WOW Air rival Icelandair is trying to scoop up some of those stranded travellers by offering a seat on any of their flights, where available, for a discounted price.
Founded in 2011 by entrepreneur Skuli Mogensen, WOW Air offered ultra-cheap flights between Europe and North America, often for as little as $99 before fees and taxes.
Every flight began or ended in the Icelandic capital of Reykjavik, which helped spur a tourism boom in the country as passengers took layovers in the island country on their way between the two continents. All in all, the airline flew roughly 3.5 million people last year.
According to aviation tracking service Air Fleets Inc., WOW had about a dozen jets in service, with another five in storage that it planned to use on expanded routes. All of WOW’s planes are made by Airbus.
The airline had 27 flights scheduled to take off on Thursday. All are grounded, stranding roughly 2,700 people.
Canadian Alex Spence is one of them.
She flew on WOW for a conference in Berlin, and is struggling to find her way home.
“I have heard absolutely nothing from WOW Air. But earlier this week I did receive quite a few emails encouraging me to upgrade my seat or check more bags, so they were definitely active in asking for more money the past few days.”
The company may not have been saying much to its passengers on Thursday, but in a letter to employees, founder Mogensen expressed his disappointment in what has happened.
“I will never forgive myself for not acting sooner,” Mogensen said. “WOW was clearly an incredible airline and we were on the path to do amazing things again.”
While customers feel left in a lurch, the news does not come as a complete surprise to those who follow the industry closely.
By aggressively adding new destinations, WOW had seen a steady uptick in the number of passengers it carried every year. But the airline never scaled up enough to cover its costs, with average revenue per passenger falling by 2017, according to the company’s last earnings report.
WOW had been trying to find an investment or bailout or buyer for itself since the middle of last year. WOW was negotiating to merge with flag-ship carrier Icelandair, but that deal fell apart. The airline then tried to strike a deal with Indigo Partners, an American company operating the airline Wizz, but that didn’t come to pass, either.
The resulting bankruptcy has left passengers like Spence not knowing what do to next.
“I always had very good experiences with them so this was not exactly what I expected to occur,” she said.
The news isn’t just bad for WOW and its customers. It’s a problem for Iceland, too. Tourism is a major industry for the country, making up 43 per cent of its GDP in 2017, according to official data.
The tourism boom in recent years coincided with the launch of WOW, as visitors to the country quadrupled since WOW’s flights started in 2012.
Data from Iceland’s tourism authority shows that more than 100,000 Canadians visited Iceland last year, making Canada the fourth most common source of tourists for the country, after the U.S., the U.K. and Germany. About one-third of Iceland’s visitors last year did so by flying on a WOW Air flight.