WOW Air — the Icelandic airline famous for $99 transatlantic flights — could be in danger of folding.
On Thursday morning, Icelandair Group announced that it no longer planned to purchase its flailing Icelandic rival, bringing the future of the budget airline into question. Without stable financial backing, it is not unlikely that the airline could fold, which could have an effect on the entire Icelandic travel economy.
"This conclusion is certainly disappointing," Bogi Nils Bogason, interim president and CEO of Icelandair Group, said in a statement. "We want to thank WOW Air's management for a good cooperation in the project during recent weeks. All our best wishes go out to the owners and staff of the WOW Air."
While the airline attracted attention through its low fares, sometimes reaching as low as $69, it would make money by charging passengers for seat assignments, food, and checked baggage.
WOW Air began operating in 2012 and has since expanded rapidly to several U.S. cities. But last year, the airline reported a $13.5-million loss. It was expected to lose an additional $28 million in 2018.
Since a bond issuance in September, the airline has been faltering financially in public, which it attributed to rising fuel costs. Earlier this week, it returned four of its aircraft to lessors, according to PAXEX.AERO. One aircraft is operating under lease.
This puts the future of its longest routes — from Reykjavki to Los Angeles and Delhi — at risk. The long-haul flights require an A330 aircraft. The airline now only has one in their fleet.
WOW Air is not the only transatlantic budget airline that has been wavering this year. Scandinavian Airline Primera Air suddenly declared bankruptcy back in October. Last year, a British airline declared bankruptcy, leaving more than 100,000 passengers stranded around the world.