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Icelandic low-cost airline Wow Air has finally admitted defeat in its quest to keep flying.
The airline announced on its website on Thursday that it had ended operations and had canceled all flights.
The carrier, who offered its first flight in 2012, had been searching for a financial lifeline having failed to secure deals with Icelandair and the private equity owner of Frontier Airlines.
Earlier this week it had sounded hopeful that it would be able to continue with bondholders agreeing to convert their bonds into equity.
The Dream Is Over
Wow Air was one of a new type of low-cost airlines that aimed to ferry passengers long distances but at a fraction of the price of more established carriers.
Unlike, say Norwegian, however, Wow used Iceland’s strategic position between North America and Europe as a hub to connect flights. This is what’s known in the airline business, unofficially, as the sixth freedom of the air.
It flew to cities such as Boston, New York, Detroit, Amsterdam, and London.
“I think ultimately Iceland is a ‘one airline town’ and probably always should be but may not always be!” said John Grant, partner at consultancy Midas Aviation.
“The market had become hugely over sized with Sixth Freedom traffic creating an ultimately false expectation of the opportunity leading to investments in tourism and airport infrastructures that were probably not sustainable in the long term.
“With that in mind, despite the attempts to save Wow and find a solution that works; a combination of an increasingly competitive North Atlantic market and too much reliance on Sixth Freedom traffic has probably brought the market back to a more balanced situation.”
Iceland’s largest airline Icelandair has suffered financial problems of its own in recent months and gave up trying to take part in Wow Air’s rescue.
It has been a particularly torrid few months for the European aviation industry in general with a host of carriers, including Primera Air and Germania, going under.
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