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WOW Air collapses – Solutions for Stranded Passengers

Airline Passenger Guide

Iceland-based WOW Air collapsed and ceased operations on March 28. They canceled all their flights, and thousands of passengers got stranded.

WOW Air has been spiraling down fast since their most serious financial troubles began in October of 2018.

I have often talked about the potential danger of ruined travel plans by booking your flight with a low-cost budget airline.

Today my warnings materialized again, and WOW Air joined the ranks of financial fatalities.

Here’s what you need to do if you are affected by WOW Air’s decision to seize operation

1. Rescue fare

When one airline folds others step in to help stranded passengers get to their destination. Of course, they also offer this because they see it as an opportunity to gain you as their customer on a future flight.

The fares that you are offered when your original airline seizes operation is called “rescue fares”.

As of today, the current airlines have stepped in and offered Rescue Fares for stranded WOW Air passengers. Check their websites for more information.

Icelandair, Easyjet, Norwegian, WizzAir, & XLAirways.

2. Information UPDATE

If you’d like to follow up on further development of the seizing of WOW Air you can check HERE.

The website for WOWAir.com may or may not be available for long, but as long as they are up it’s a good idea to keep checking for updates there as well.

3. Recovering your money lost for your ticket

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  • If you paid for your ticket with your credit card call your bank. Find out how to file a what’s now a disputed charge for a product not delivered. Your card company may also offer travel insurance through your cardholder agreement that may or may not cover a canceled flight.
  • If you purchased travel insurance, then your policy may include trip interruption coverage.
  • If you are located within the European Economic Area: If you got your ticket from a European travel agent, purchased as a package (for instance, your flight and hotel included) you are protected through the law called “Package Travel Directive”. You are supposed to contact your travel agent to be accommodated on another flight.
  • An airline bankruptcy activates a lot of different rules, ranging from European law to Air Passenger Rights. Thus, you may receive compensation from the bankruptcy proceedings of WOW Air. Therefore, make sure to file your claims with the Administrator/Liquidator of the bankruptcy.
  • In addition to recovering your money spent on the ticket price there is one more thing you are strongly advised to do:

Flight cancellation compensation

An airline that seizes to operate will not be flying you from point A to B, obviously. This is where you become eligible for additional compensation, beyond what you paid for your ticket!

Do you have any hopes of receiving flight cancellation compensation from a bankrupt airline? Yes, you do!

As Rene Goedkoop of Air-Collect, the CEO of one of the best and largest flight delay/cancellation service companies in the world just quoted me:

“Bankruptcy does not mean that the bankrupt companies’ assets are zero”!

He’s so correct with his statement!

What that means to you as a stranded passenger is that you can, and you should still file for compensation for your WOW Air cancellation! It may take a while to receive your compensation in lieu of bankruptcy proceedings. But your patience should pay off.

Waiting to receive the approximately $700 each WOW Air ticket holder is entitled to are worth the wait for most!

Let’s say your entire family of 5 were to travel on WOW-Air. That means your total payment to your family would amount to $3,500 ($700 per passenger, multiplied by 5).

The easiest and quickest way for you to get your additional compensation would be to contact a service, such as Air-Collect. After you’re done completing the claim form you simply sit back and relax until you get your payment. Air-Collect will do all the legwork for you.

An airline’s operating cost is often not sustainable for an all low-fare carrier

Low-cost carriers always start with fanfare and hoopla, attracting passengers hunting for the lowest fare to fly where they need to go.

The transatlantic routes between the U.S. and Europe became one of the early battlegrounds for low fares across the Atlantic Ocean.

Many cheap-fare upstarts entered the market, and most failed. Today WOW Air joined the list of financial fatalities.

Why do low-cost airlines frequently fail?

Let’s say you are going to fly on a Boeing 787-900 (B787) from Los Angeles to Paris on a low-budget airline. As you know, the B787 can hold a lot of passengers.

As an arbitrary sample, let’s say that the 193 passengers in coach paid an average of $240 for each ticket, while premium class passengers paid $1,100 each.

Total revenue for those tickets amounts to $84,720 for the airline, plus miscellaneous sales, such as baggage fees, meals, and drinks, at $18,000.

The total revenue generated for that flight was $102,720. This sounds great, but…

An average total operating cost for a B787-900 is $15,000 PER HOUR! Multiply that with a 10-hour flight, and you’ll see that it cost the airline $150,000 to operate that flight from Los Angeles to Paris.

With $102,720 collected as revenue the cost amounted to $150,000. This flight just resulted in a single flight loss at the tune of $47,280!

If you are a major airline you can afford to go head-on with your competitors, occasionally incurring such losses.

But, if you base your entire operation on low-cost only, then how long can you last before you go bankrupt?

Hourly operating cost for miscellaneous airlines
Here is a 2014 sample hourly operating cost per hour for different airlines and different aircraft types. Source: PlaneStats.com.

How do you feel about budget airlines offering cheap prices?

Leave your comment below.

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