(qlmbusinessnews.com via news.sky.com– Thur, 28th March 2019) London, Uk – –
Passengers are left in limbo as heavily indebted Wow fails to complete a deal with new investors to secure its future.
Icelandic airline Wow Air has collapsed, stranding thousands of passengers, after an apparent failure to secure a cash lifeline.
It had grounded aircraft early on Thursday following months of talks with prospective financial backers – saying it was in the final stages of negotiations with a group of investors and further information would be provided later in the morning.
However, the heavily indebted company later said it had “ceased operation” and cancelled all future flights.
It gave no further details but urged passengers affected to re-book with other airlines.
The budget carrier is the latest in a string of airlines to fail over the past two years – as oil prices have risen sharply in a competitively-priced market
Monarch Airlines, Primera Air, Flybmi and Air Berlin have been among the most recent casualties while struggling Flybe was bought up by a consortiumincluding Virgin just last month.
Wow used its Reykjavik base as a hub airport to connect Europe and North America – with UK services operating from Gatwick, Stansted, Bristol and Edinburgh.
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It flew to 27 destinations in all – including Washington DC and New York.
Wow, which employs 1,000 staff, had seemed confident of a deal to secure new funding.
It announced on Tuesday that bondholders had approved a plan to convert their bonds into equity – allowing talks with new investors to begin.
The company was founded by Icelandic telecoms entrepreneur Skuli Mogensen in 2012 and was wholly owned by his Titan investment vehicle.
Wow apologised for the disruption to its passengers but Rory Boland, the editor of Which? Travel, accused the firm of treating customers with contempt.
He said: “Passengers will quite rightly be appalled that Wow Air, was still selling tickets right up to the moment it collapsed knowing full well that any tickets sold would likely not be worth the paper they are printed on.”
Wow issued advice on customers' rights, which included the chance that those stranded abroad could secure flights at a reduced rate on so-called rescue fares.
The statement continued: “Passengers whose ticket was paid with a credit card are advised to contact their credit card company to check whether a refund of the ticket cost will be issued.
“Passengers who bought their ticket from a European travel agent (within the European Economic Area) as a part of a package tour (a package which includes flights and accommodation or other services) are protected by the Package Travel Directive.
“Those passengers are advised to contact their travel agent to arrange an alternative flight.
“Passengers who may have bought travel protection, or those passengers whose credit card terms may include such protection, may be entitled to claim compensation and assistance due to delays or travel disruption.
“However, such compensation is often limited,” it said.Sponsored Links
By James Sillars, business reporter
