WOW Airlines, the discount provider based in Reykjavik, Iceland, closed up shop overnight, leaving stranded passengers to mutter its name in frustration.
The airline had been in talks with rival Icelandair and equity partners to find new capital, but talks fell through and the news was abruptly announced that the airline would cease operations. Passengers were stranded in both North America and Europe, and the airline had little comfort to offer them. Many turned to social media to find help and replacement flights.
The debacle is a reminder of how important it is to share bad news with your stakeholders and be honest about the future at all times. Up until the last moment, WOW had hoped to strike a deal, and even when it began grounding flights, it tried to offer hope.
Looks like @wow_air is turning off the airline until it completes a new equity deal. "All flights have been postponed until documentation with all parties involved have been finalized." https://t.co/yI6oSwnjBU pic.twitter.com/u4V3QsVhL9
— Jon Ostrower (@jonostrower) March 28, 2019
However, a deal never materialized.
Hundreds of passengers have been left stranded with no idea how to get home or complete their travels after budget airline Wow Air abruptly collapsed on Thursday.
The Icelandic airline said in a tersely-worded statement that it had canceled all flights and told passengers to try to book with other carriers.
It did not offer refund tickets, but told passengers to check with their credit card company and European regulators.
The company announced its demise with matter-of-fact language and no apology.
The airline wrote in a statement on its website:
WOW AIR has ceased operation. All WOW AIR flights have been cancelled.
How will I reach my destination?
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.
What are my rights?
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 who bought their ticket from a European travel agent (within the European Economic Area) as a part of a package tour (a package which includes flights and accommodation or other services) are protected by the Package Travel Directive. Those passengers are advised to contact their travel agent to arrange an alternative flight.
Passengers who may have bought travel protection, or those passengers whose credit card terms may include such protection, may be entitled to claim compensation and assistance due to delays or travel disruption. However, such compensation is often limited.
Reporters were left to read between the lines to uncover the cause behind the airline’s demise.
Many noted that the collapse is bad for Iceland’s tourism economy, and reports indicate the country’s currency is down on fears of a tourism downturn.
The company’s model was to entice passengers with ultra-low prices before slapping on extra charges for seat selection, baggage, leg room and expensive refreshments. A typical base fare for a Wow flight from the U.S. to Europe could come in at less than $200.
A fall in tourist visits to Iceland and rising fuel costs had been cited as headwinds to profitability.
The airline had also suffered poor customer reviews and was particularly criticized over recurring delays.
Should the airline have been more forthcoming with customers about its impending crisis? Reports suggest the company left breaking the bad news until the very last minute.
It appears that Wow Air gave no indication of its impending collapse and still allowed people to purchase tickets on their site in the hours running up to its Thursday morning announcement.
Rory Boland, the editor of UK consumer rights charity Which?, tweeted that as of 7 a.m. local time—about two hours before Wow Air declared its collapse—people could still book and pay for tickets on the carrier’s website.
Stakeholders wanted to hear from CEO and founder Skuli Mogensen, and an internal memo found its way into many news reports.
“I will never forgive myself for not acting sooner,” Mogensen said in a letter to employees Thursday. “WOW was clearly an incredible airline and we were on the path to do amazing things again.”
Competitor Icelandair was quick to offer help to stranded passengers and used its channels to reach disgruntled consumers.
As a result of WOW air’s operational halt, we have set up discounted Economy fares for stranded passengers en route to, from, or through Iceland.
These fares will only be available for passengers who have already embarked on their journey, and have a return ticket with WOW air between 28 March and 11 April 2019. The fares are subject to availability.
It also shared via Twitter:
— Icelandair (@Icelandair) March 28, 2019
On social media, many found communication from WOW to be inadequate.
Passengers have a wide range of rights under EU legislation, which Iceland also abides by, but if an airline fails these entitlements become academic.
Previous passengers who have claims against Wow Air for previous delays and cancellations, and the costs associated with them, are being told: “Your claim is with the accounting waiting to be finalised.
“Due to unforeseen circumstances, the payment process will, unfortunately, take longer than expected.
“We can assure you that your claim is still active and will be processed as quickly as possible.”
Laura de Beus tweeted: “I see that you have been ignoring me and taking that time to respond to new customers that you have disappointed.
“Please just handle my payment before your company falls. You owe me €2,000.”
After the collapse, Twitter users shared their dismay and calls for help:
Woah. I know people with flights on @wow_air over the next few months. Seeing people posting in my travel groups saying they're stranded overseas, with no word of refunds or a plan. https://t.co/QDrSqIJ6vK
— Deanna Allbrittin (@deannaTVnews) March 28, 2019
@flightradar24 I have a flight from Rekjyavik to Berlin (Wow air) day after. What’s my best option now? Any information?
— Sahil.W (@SahilW8) March 28, 2019
Others offered sympathy to crew members who had lost their jobs:
What awful news. Good luck to WOW Air staff and crews. I know it’s awful for passengers, but you just need to get to your destination. WOW Air crews will be worrying about keeping a roof over their heads and their next job. Very sad.
— Safety in the Sky (@safetyinthesky) March 28, 2019
Wow Air now closed down.
Sympathy with staff and stranded travellers, as well as those with forward bookings.https://t.co/Ana5A7IS0x
— Simon Calder (@SimonCalder) March 28, 2019
Still others tried to link the news to Boeing’s recent PR crisis, despite the airline having an Airbus fleet:
Are their fleets all 737-Max?
— Kemosabe (@Captain_Jack24) March 28, 2019
If you have to announce your business is closing, Michelle Garrett has some tips about how to do it with grace.
Adopting an approach that considers all your audiences and allows for planning and transparency is imperative when a business closes.
“Overall, business [closings] are very rarely unforeseen,” says Smith. “There is usually a chain of events that lead up to them. With a clear communications plan, the announcement will not seem as shocking.”
What do you think of WOW’s crisis response efforts, PR Daily readers?