Budget airline declares bankruptcy, stranding passengers at airports

Budget airline declares bankruptcy, stranding passengers at airports

Under extreme financial strain, the Icelandic budget carrier Wow air announced on Thursday they would cease all their operations, leaving thousands of people stranded across two continents.

The next day, passengers got an email from WOW Air, saying the airliner ceased operations and flights were canceled.

"If you are affected, we advise you not to come to the airport but to check with the airline or the CAA's website for more information".

WOW, which focused on low-priced travel across the Atlantic, advised stranded travellers to seek flights with other airlines.

According to WOW Air, some airlines may offer rescue fares at a reduced rate, in light of the circumstances.

Though many people, especially older millennials, prefer debit cards over credit cards, credit cards offer more consumer protection in cases where services can not be rendered, like a flight on a canceled airline.

The airline notes that fares are "subject to availability". It flew a total of 3.5 million passengers previous year.

So you might assume your airline's doing well - especially if, like Wow Air, you could book flights right up until the last moment - but it's worth keeping tabs on the airline in the lead up to your flight.

Low-budget carrier WOW air seemed too good to be true with its "cheap flights" for global destinations.

Its bankruptcy, which highlights how hard it is for airlines to make money from budget flights across the Atlantic, comes after six months of turbulent negotiations to sell its business.

Founded in 2011, WOW Air exploited Iceland's location in the middle of the North Atlantic to offer a low-priced service between Europe and North America as well as tapping into a tourist boom to the volcanic island.

Footage from Newark shows dozens of travelers waiting in a packed departure lounge after it was announced their flights had been cancelled. It had flights to airports in cities including Washington, D.C, New York, Paris, London and its Reykjavik hub.

The travel editor of the Independent, Simon Calder, said in these situations other airlines would step in as they did not seek to make money out of "a bad situation". Several European airlines have shut down in the past year amid volatile fuel prices and industry overcapacity, including Primera Air of Denmark, Germania of Germany, Flybmi of Britain and VLM of Belgium.

"I will never forgive myself for not acting sooner", Mogensen told employees in a Thursday letter, CBS reported. "WOW was clearly an incredible airline, and we were on the path to doing awesome things again".

Wow Air CEO Skúli Mogensen said that negotiations to save the company went until the early morning hours in Iceland.

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