In a dramatic middle-of-the-night announcement, Icelandic budget carrier Wow Air ceased all operations, leaving passengers stranded on both sides of the Atlantic.
In a statement on its website, the company said all flights have been canceled and travelers need to make their own arrangements.
“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,” the statement reads.
Wow passengers, as in the Primera no-warning collapse in October 2018, are currently stranded around the world, trying to figure out ways to get home. At the same time, travelers who purchased tickets for a future trip now need to figure out how to recoup their money.
The complete and sudden closing of Wow Air, which was much bigger than Primera, and the shuttering of other smaller carriers in Europe, may have some big implications: the transatlantic flights have been very cheap thanks to strong competition, innovation attempts, and lower fuel prices.
An airline’s shuttering doesn’t necessarily have to strand all passengers. Air Berlin, for example, provided 19 days notice to the public that it would end flights in 2017. When Primera shut down, Scott Keyes, who runs Scott’s Cheap Flights, told Yahoo Finance the unexpected shutdown that strands passengers is unusual. However, this is the second time in six months; it’s becoming less unusual.
Passengers do not typically factor in airlines’ credit ratings or likelihood of still being in business next month when they buy tickets. But with the second higher-profile situation in which affected passengers plead via social media at other airlines to help them get home, people may begin to think twice about taking a newer airline without such an established track record — or booking too far in the future.
Wow Air’s end of operations also represents further thinning of the competition that helped bring air travel to crazy-cheap price levels. Iceland Air is now the major way to travel to the popular volcanic island, likely bringing up the prices given the solid demand and a slash in supply. And with the heavy stopover promotions by Iceland’s tourism industry as travelers shuttle between the U.S. and Europe, another transatlantic low-cost option vaporizes.
All of this also comes amid the Boeing (BA) 737 Max disasters that led to the grounding of many flights around the world, throwing the company, future orders, and airlines into question. Wow had previously experienced difficulties with deliveries of Airbus planes — as had Primera, which contributed to its downfall — which led to it cutting routes at one point. With the 737 Maxes in complete uncertainty and Airbus orders booked far into the future, new fuel-efficient aircraft that are often championed as part of the low-cost equation are now in short supply.
Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, personal finance, retail, airlines, and more. Follow him on Twitter @ewolffmann.
The era of crazy cheap flights is coming to a close
Here’s why European airlines keep going bust