Wow air, an Irish budget airline, has collapsed, leaving many passengers stranded after all of its flights were cancelled.
Today, the Icelandic carrier became the latest airline to discontinue its operations, abruptly declaring its closure hours after saying that it had suspended its flights to raise funds.
Many customers posted on social media as they express their disbelief on discovering their flights to and from Iceland had been cancelled, with the airline telling the passengers to look for flights elsewhere.
The said announcement will also come as a devastating blow to approximately 1,000 employees at the airline. The company had already revealed plans to cut 111 jobs and reduce its fleet size to 11 planes to lower costs.
The firm had been under pressure from creditors, however, this morning, it had said that it was in the final stages of completing an equity fundraising with a group of investors.
Last Tuesday Wow air said that it had achieved an “important milestone” in restructuring the company, after bondholders approved its plans to convert their bonds into equity and negotiations with investors started.
Previously, it had been in negotiations with Icelandair, its rival, however, the talks seem to have broken down. Last year, the privately-held airline had come close to being acquired in an all-share deal with Icelandair, however, according to Reuters, the rival pulled out from the deal.
Last week, private equity fund Indigo Partners, also cancelled a proposed investment.
Today, the airline posted on its website saying: “Wow air has ceased operation. All Wow air flights have been cancelled.”
“Passengers are advised to check available flights with other airlines. 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.”
Last year, the company had announced an ambitious vision to expand into India, the fastest-growing aviation market in the world, through low-cost long-haul flights between North America and India.
Skúli Mogensen, an entrepreneur and the founder and CEO of the company, also won some awards including Marketing Man of the Year in Iceland in 2017 and a national Business Man of the Year award in 2011 and 2016.
Mogensen established the firm in 2012, and by last year, Wow air was carrying 3.5 million passengers per year.