Unable to secure much needed funds, WOW Air has confirmed that it has ceased all operations and all flights have been cancelled. In an alert, WOW Air said that some airlines may offer some reduced rate rescue fares for any stranded passengers while other should contact their credit card provider or insurance company for details of any possible refund.
Chairman Skuli Mogensen said in a letter to employees that the airline had “run out of time and have unfortunately not been able to secure the funding of the company,” adding that he will “never be able to forgive myself for not taking action sooner”.
Mogensen has certainly tried to keep the airline afloat with ongoing negotiations with Icelandair and Indigo Partners but the airline succumbed to its financial difficulties in the end and was unable to secure new equity from bondholders.
Once again we are left questioning if the low-cost, long-haul model is at all possible over the Atlantic Ocean. Laker, WOW, Norwegian – none have ever made a profit. The reason: the low-cost, long-haul model exists within the major Atlantic carriers, especially IAG and American, their prices are so very keen in economy, premium economy, business and first that it leaves very little room for a pure low-cost, long-haul model to compete, no matter the class targeted. Emirates should also be added to that list since its prices are too very competitive. In Asia, geography makes low-cost, long-haul work, but AirAsia X stumbled heavily at first, Lion too is having trouble making it pay. Only JetStar (with a fair bit of parental help) has made low-cost, long-haul work to date. Ryanair was indeed wise to stand back, say what you like about that airline, but the management on the whole are always worth backing.