Thousands of passengers are stranded this morning as Wow Air cancels all its flights.
The troubled Icelandic airline is heavily in debt and has been seeking a backer for months. Talks with a US financier and the rival carrier, Icelandair, have broken off in the past few days.
As dawn broke at Keflavik airport outside Reykjavik, the airline announced:
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“Wow Air is in the final stages of finalising equity raise with a group of investors. All flights have been postponed until documentation with all parties involved have been finalised.
“All passengers have been informed via text message/email to the contact details listed in the booking.
“Passengers scheduled on flights to/from Iceland with WOW air on Thursday 28 March are entitled to cancel their reservation for a full refund or change their reservation to the next available Wow Air flight.
“Wow Air apologises for the disruption to travel plans.”
The airline has promised to give further information at 9am local time, which is 10am GMT.
Wow Air is believed to owe around £150m.
The Icelandic budget airline was founded by an Icelandic entrepreneur, Skúli Mogensen. It first flew to Paris on 31 May 2012 and later that year took over an existing airline, Iceland Express.
The carrier currently employs around 1,000 people and flies an all-Airbus fleet. In 2018 it carried 3.5 million passengers.
The main business model is to connect Europe and North America through its hub at Reykjavik, in competition with the long-standing incumbent, Icelandair.
Another rival, Primera Air, went bust in 2018.
Thousands of passengers are on the wrong side of the Atlantic. From Baltimore-Washington International, Suheradi tweeted: “My flight out of BWI was delayed twice for a total of 5 hours and then just cancelled.
Many passengers are stranded without any place to stay tonight or any idea of what’s going on.”
Wow Air currently has flights scheduled between Gatwick and Reykjavik, with services due to switch to Stansted on Sunday. Edinburgh is another summer destination.
Over the past few days the a one-way flight from Stansted to Reykjavik priced at £756. On the same day, easyJet has a flight from Luton to the Icelandic capital for £57.
Increasing fares to astronomic levels to deter bookings has been used as a technique in the past by failing airlines, notably Monarch in 2017.
Passengers have a wide range of rights under EU legislation, which Iceland also abides by, but if an airline fails these entitlements become academic.
Previous passengers who have claims against Wow Air for previous delays and cancellations, and the costs associated with them, are being told: “Your claim is with the accounting waiting to be finalised.
“Due to unforeseen circumstances, the payment process will, unfortunately, take longer than expected.
“We can assure you that your claim is still active and will be processed as quickly as possible.”
Laura de Beus tweeted: “I see that you have been ignoring me and taking that time to respond to new customers that you have disappointed.
“Please just handle my payment before your company falls. You owe me €2,000.”
Past experience suggests it is unlikely that a rescue will be forthcoming. The airline may have some value in the slots that it owns, but its brand value has collapsed over the past days and weeks.
Wow Air built its UK-Iceland-US business partly through fake claims about its fares, asserting it would fly passengers from Gatwick via Reykjavik to New York for £99 when the lowest fare was actually £170.