Wow Air collapses, latest budget airline to go out of business
- A Monitor Desk Report 29 Mar, 2019 | 2353 Views|-+
Dhaka: Iceland's Wow Air ceased all of its operations on March 28 after efforts to raise more funds failed.
Wow, which is focused on low-cost travel across the Atlantic, advised stranded passengers to check available flights with other airlines. It flew a total of 3.5 million passengers last year.
Wow had earlier postponed flights on March 28 as it entered what it had hoped were the final stages of an equity raising with a group of investors.
For the sudden delay, Wow replied with an apology and offer of further assistance to its passengers.
Wow is the latest budget airline to go out of business as the European airline sector grapples with over-capacity and high fuel costs. Recent failures include Britain's Flybmi, Nordic budget airline Primera Air, and Cypriot counterpart Cobalt.
Wow has been pursuing different avenues to raise money over the past few months.
It ended talks with rival Icelandair on March 24 while veteran low-cost airline investor Bill Franke also had canceled a proposed investment through private equity fund Indigo Partners.
Founded in 2011 by entrepreneur Mogensen, Wow uses smaller single-aisle planes to fly between Iceland and many destinations in the United States and Europe.
Wow controlled a quarter of the market share in the fast-growing, low-cost, long-haul transatlantic market in 2018.
Hence, there are fears of a knock-on effect on Iceland's important tourism industry.
Around 30 percent of tourists visiting Iceland last year flew with Wow and the collapse could trigger a 16 percent drop in tourists this year, research from Icelandic bank Arion showed.