"Many Photos" - Icelandic budget airline Wow Air goes into administration leaving thousands of passengers stranded

Icelandic budget airline Wow Air was selling tickets up until 7am this morning, just hours before it collapsed after failing to secure an emergency £32 million cash boost, leaving thousands of passengers stranded. 

All flights have been cancelled by the carrier, who had previously said it was in the final stages of completing an agreement to raise new funds with a group of investors.

The budget airline was still selling flights up until 7am this morning, mere hours before it announced its collapse. 

Four flights were due to travel from Iceland's Reykjavik Airport to London Gatwick today. 

Budget airline Wow Air has ceased all operations, leaving thousands of passengers stranded, including these passengers at Toronto airport

One passenger took to Twitter to reveal how police officers had entered a Wow Air plane just after it landed in Baltimore last night, to seize the plane. 

According to Icelandic newspaper Frettabladid, Wow Air was reportedly in need of £32 million to save the company. 

It originally struck a deal to be bought by rival Icelandair in November, but this was called off weeks later over fears it would not win shareholder support.

US private equity company Indigo Partners then made an offer for Wow Air but this too fell through.

It then went back to Icelandair this week but that bid has now failed as well.

Wow Air said in a statement: '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.' 

The Icelandic carrier, which has been plagued by financial issues, has also cancelled all flights

Wow Air has been struggling financially for months and has repeatedly tried to find a buyer or investors.

Last year the airline was forced to sell four A32 jumbo jets and return four A330s, reducing its fleet to just 11 planes.

The airline, founded by entrepreneur Skuli Mogensen, began operations in 2012 and expanded quickly.

It specialized in ultra-cheap flights between North America and Europe, with flights from 27 airports, including Washington, D.C, New York, Paris, London and its Reykjavik hub.

Mogensen, 51, said in a letter to employees after the news broke: 'We have run out of time and have unfortunately not been able to secure the funding of the company.

'I will never be able to forgive myself for not taking action sooner.'

Rory Boland, Travel Editor of Which?, 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.

'You will need to check if you booked your flights as part of a package as this will mean you are ATOL protected and will be entitled to your money back.

'If not, you may still be able to claim through your travel insurance or card issuer but it will depend on your circumstances. You can visit which.co.uk for more advice on your rights.'

He added on Twitter: 'A family of four travelling over the bank holiday could have paid over a thousand pounds this morning to book flights the airline knew would never take off (or refund). It went out of business just two hours later. Complete and utter irresponsibility.'

The other budget airlines to have collapsed in recent months 

Wow Air is the latest in a string of budget airlines to have collapsed following financial issues.

British firm Monarch Airlines went bust in October 2017, leaving thousands of passengers stranded and more than 1,000 workers redundant. 

In October 2018, Danish firm Primera Air collapsed, with directors saying that they could not get financing from the bank and had spent more than £26 million leasing planes and rebuilding one with severe corrosion.

British airline Flybmi went into administration in February of this year,  blaming rising fuel costs and Britain's uncertain future after Brexit for its money woes. 

Air Berlin also ceased operations in October 2017, with a debt of £700million.

In January, Flybe narrowly avoided a similar fate after it was bought by a consortium including Virgin. 

The now-collapsed airline wrote on its website: '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 may also be entitled to compensation from WOW AIR, including in accordance with European regulation on Air Passenger Rights.'

Wow Air is the latest in a string of disasters and collapses to have hit the aviation industry recently. 

Monarch Airlines, Primera Air, Flybmi and Air Berlin have all collapsed recently, while struggling Flybe was bought by a consortium including Virgin in January.

What to do next following the collapse of Wow Air 

MoneySavingExpert.com has released the following advice after news broke of the collapse of Wow Air:  

If you've booked a flight, here's what you can try to get your money back:

Check if you have ATOL protection – ATOL is the name of the protection scheme run by the Civil Aviation Authority (CAA).

Wow Air did not offer ATOL protection, however some passengers who were due to fly with it as part of a package holiday may have ATOL protection. The simplest way to check is to look at your booking – if you had ATOL protection, you should have been sent an ATOL certificate at the time.

If you do have ATOL protection, the travel firm you booked with is responsible for your flight arrangements and must either find alternative flights, so that your holiday can continue, or provide a full refund. See our Holiday Rights guide for more.

Paid on a credit card and your flights cost £100+? 

Try Section 75. Under Section 75 of the Consumer Credit Act, if you booked directly with a firm and paid on your credit card for a transaction costing at least £100, the card company's equally liable and you may be able to claim from it. See our Section 75 guide for more info and template letters.

Flights less than £100 or paid on a debit card? 

Try chargeback. Unlike Section 75, the chargeback scheme isn't a legal requirement, it's just a customer service promise. But it's worth trying and we've seen successful claims from people using this. You may be covered by the Visa, Mastercard or American Express protection schemes, and should be covered for the whole price of the flight. See our Chargeback guide for full details.

Try your travel insurance. It's worth seeing if your policy covers the airline going into administration – though many insurers won't cover you unless you have specific travel firm failure cover. Contact your insurer to check.

I'm stranded abroad - what should I do?

Wow Air is advising passengers to check available flights with other airlines. See our Cheap Flights guide for thrifty options.

Some airlines may offer flights at a reduced rate, so-called rescue fares, in light of the circumstances. We'll have more information on these rates when they become available. 

What about hotels, car hire and other costs?

If you can't get to your destination because your Wow Air flight's been cancelled, you could also lose out if you've already booked accommodation or further travel – these are known as consequential losses.

First, check if you can cancel these bookings and get a refund, either as part of the T&Cs or as a goodwill gesture from the provider.

If that doesn't work, check if your travel insurance will cover you. Some fuller policies give you 'abandonment protection' for consequential losses – but it's not guaranteed. See our Holiday Rights guide for a breakdown of different insurers' policies.

Occasionally, we see people use Section 75 to claim for consequential losses (see above), but this isn't the norm, so don't bank on it.

I was due a flight delay payout from Wow Air – what happens now?

Unfortunately, you may find it difficult to get your cash. Passengers have struggled to get delay payouts after other airlines – notably Monarch – have gone bust in the past.

One option is to sign up to become an unsecured creditor – but again, you'll be at the back of a long line of people claiming. 

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News Photo Icelandic budget airline Wow Air goes into administration leaving thousands of passengers stranded
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