Icelandic low-cost airline Wow Air has finally admitted defeat in its quest to keep flying.

The airline carried an announcement on its website on Thursday that it had ended operations and had canceled all flights.

The carrier, which 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.

UK consumer publication Which? said that Wow Air was still selling tickets at 7am on the morning of its collapse.

“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,” said Rory Boland, Which? travel editor.

The Icelandic Transport Authority advised passengers to check available flights with other airlines. Some passengers may also be able to claim refunds or compensation.

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.

Skúli Mogensen the airline’s CEO, founded it in 2011. He was also the owner.

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.

Problems started to build for the airline last year with customer service complaints and rising fuel costs. The airline then faced stricter terms from aircraft leasing companies. Wow Air lost $33.6 million in the nine months to the end of September 2018. Over the last few weeks the situation has spiraled out of control.

“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.

Photo Credit: A Wow Air A330 taking off from Amsterdam. The airline has stopped flying. Nicky Boogaard / Flickr