WOW Goes Bust

In case you missed the major WOW airlines news this morning, they have ceased operation. “All WOW AIR flights have been cancelled.” – WOW website. But what does this mean for WOW passengers?

Well, it means they are stuck. Because of the lack of service and funding WOW is crazy enough not responsible to get people home. It may sound shocking, but this is truly the case for many (if not all) airlines. Luckily most airlines are willing to pick up the slack. IcelandAir is offering discounted rates to WOW Air customers as long as they fill out a form first. It is on a first come first serve basis, but they are cheap and thankfully assisting these poor stranded travelers.

According to The New York Times, “Wow Air’s financial struggles had been a source of concern in Iceland. The finance minister said contingency plans were in place if the airline collapsed, including assistance for stranded passengers, but added that the government would not rescue the airline, according to local news reports.” Iceland has less than 400,000 people, but over 2.2 million visited last year alone. This was mainly due to the fact that tourism to the country was increased because of free layovers, up to 7 days. This gave may travelers an opportunity to explore a country they may not have planned for in the past, it gave them a 2-for-1 shot on their cross Atlantic flights.

They grew, but they grew too quickly. Expanding at an extremely quick pace set them up for unsustainable productivity. At one point WOW had 47 destinations for its fleet of 20 aircraft. However, by November of 2018 the fleet was starting to shrink and with it destinations. The US went from 15 destinations to 4. Initially blaming mechanical issues, the routes were canceled shortly after that announcement.

Europe also was loosing destinations, but people continued to buy tickets. WOW was struggling way back in early 2018 with higher fuel prices that led to a loss of $33.7 billion dollars through September of 2018. Their appeal, cheap tickets and nickle and diming of perks (bags, seats, food) allowed many people to fulfill their desire to explore another country. But none of this was enough to save the ill-fated WOW Air.

They shuttered their doors on 3/28/19 – and while it leaves many unemployed, many stranded – the big question remains what will the impact to the Icelandic economy be? Will another airline be able to pick up the economic slack of this loss for the country or will we see another recession hit Iceland a mere 11 years after the devastation in 2008.