WOW Air, one of the most famous low-cost carrier is bankrupt now. The news follows a failed acquisition by Indigo Partners, in addition to failed talks with full-service rival Icelandair. From past five months WOW Air has been facing financial difficulties. In fact, at one time the CEO of the company used his own money to prop it up.
A number of high profile airline already collapsed last year, and the most common reasons are rising fuel prices and unfavourable exchange rates. They have not been able to compete in this competitive market where ticket price is everything. We already seen the bankruptcy of Primera Air during first week of October and few weeks later followed by the demise of Cobalt, with Flybe almost following.
German airline Germania and UK regional airline FlyBMI were the most recent airline bankruptcies. Now, WOW Air joins their team as a bankrupt airline.
WOW Air’s Troubles
During mid-October 2018, the first hint of trouble within WOW Air arrived. The airline started to cancel routes and one of the top aviation news site-Simple Flying asking the question “Is WOW Air on the verge of major monetary troubles?”. This was confirmed in the early November when Icelandair tried to purchase WOW Air.
The Icelandair deal collapsed at the end of November then Mr. Skúli Mogensen, CEO of WOW was forced to take action. He used €5.5 million of his own money into the airline. But unfortunately it was not enough to keep the airline in business. He blamed the following for the financial troubles:
- Negative publicity of WOW’s financial state;
- Stricter terms imposed by creditors and lessors;
- Increasing oil prices;
- The collapse of Primera Air;
What if I have flights booked?
Firstly, if you booked the flights with WOW Air, do not go to the airport because the airline has suspended all their operations. WOW Air has told their passengers to check the availability with other Airlines. While also mentioning “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.”
Passengers are advised to contact their bank or credit card issuer to see whether they are able to get a refund or not on their flight tickets. Passengers are advised to contact their travel agent or tour operator, if flights are the part of a package tour.
Finally, you should check to see whether you are protected in the case of airline bankruptcy because few travel insurance packages have clauses for airline insolvency. If this is the case, make sure to contact your insurance provider who will detail the next steps.
Are you affected by the suspension of WOW Air flights? Let us know your story in the comments down below!