Just days after reaching a deal with debtholders and expressing confidence about finding new investors, Wow Air on Thursday morning grounded its fleet and ceased operations, leaving passengers stranded in Europe and North America. In a brief notice posted on its website, the Icelandic ultra-low-cost-carrier (ULCC) stated it “has ceased operation. All Wow Air flights have been canceled.” It advised affected passengers to check with other airlines for rescue fares.
“We have run out of time and have unfortunately not been able to secure the funding of the company,” Wow Air founder and CEO Skúli Mogensen wrote in a letter to employees cited by Bloomberg. “I will never be able to forgive myself for not taking action sooner.”
Wow started operations in 2012 and ran into financial difficulty in 2018 after years of rapid expansion, during which it offered rock-bottom fares to gain market share in the Europe-North America transfer market using the geographically strategic location of Reykjavik Keflavík Airport as its base. The ULCC restructured into a much smaller operation by the end last year and nearly halved its fleet from 20 to 11 single-aisle Airbus aircraft while simultaneously starting a search for new investors. Talks with U.S. private equity fund Indigo Partners and two sets of negotiations with Icelandair Group, however, proved unsuccessful. On Tuesday, Wow announced its creditors agreed to convert their bonds into equity and “formal discussions” with investors to fund the company had started.
Wow Air joins a growing list of airline failures in Europe. Berlin-based Germania and UK regional airline Flybmi ceased operations last month, while bankruptcies last year include Primera Air, Small Planet Airlines, VLM and VLM Airlines Brussels, Switzerland’s Skywork Airlines, and Cobalt Airlines.