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Budget airline Wow air collapses with all flights cancelled and passengers stranded

·Finance and policy reporter
Skuli Mogensen, CEO of WOW air, poses with cabin crew members in 2017. Photo: REUTERS/Pascal Rossignol/File Photo
Skuli Mogensen, CEO of WOW air, poses with cabin crew members in 2017. Photo: REUTERS/Pascal Rossignol/File Photo

The budget airline Wow air has collapsed, leaving passengers stranded after all flights were cancelled.

The Icelandic carrier became the latest airline to cease operations today, abruptly announcing its closure just hours after saying it had suspended flights to raise funds.

Many customers took to social media in disbelief on discovering their flights to and from Iceland had been cancelled altogether, with the airline advising passengers to search for flights elsewhere.

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The announcement will also come as a devastating blow to around 1,000 staff at the airline. The firm had already revealed plans to cut 111 jobs and cut its fleet size to 11 planes to reduce costs.

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The company had been under pressure from creditors, but had said only this morning it was in the final stages of completing an equity fundraising with a group of investors.

On Tuesday Wow air said it had achieved an “important milestone” in restructuring the firm, after bondholders approved plans to convert their bonds into equity and talks with investors began.

It had previously been in talks with rival Icelandair last week, but the discussions appear to have broken down. Last year the privately-held airline had come close to being bought in an all-share deal with Icelandair, but the rival pulled out, according to Reuters.

Indigo Partners, a private equity fund, also cancelled a proposed investment last week.

The airline said on its website today: “Wow air has ceased operation. All Wow air flights have been cancelled.

“Passengers are advised to check available flights with other airlines. 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.”

Only last year the firm had announced an ambitious vision to expand into India, the world’s fastest-growing aviation market, through low-cost long-haul flights between India and North America.

The firm’s founder and CEO, entrepreneur Skúli Mogensen, also won Marketing Man of the Year in Iceland in 2017 and a national Business Man of the Year award in 2011 and 2016.

Mogensen founded the firm in 2012, and by 2018 Wow air was carrying 3.5 million passengers a year.

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