It’s no secret that Icelandic budget airline WOW Air has been suffering financially for quite some time now. The airline desperately tried to secure funding from other major airlines like Icelandair in the latter half of 2018. However, the deal fell through when it was discovered that WOW Air couldn’t even afford to pay its aircraft lease back in November. Now, WOW Air has ceased all operations, leaving passengers stranded around the world.
WOW Air was founded in 2011 as a no-frills airline to funnel tourism into Iceland from the United States and Europe. The airline offered free stopovers for flights headed to Europe, and flights as low as $99 from LA to Reykjavik back in 2017. It was all going well for the carrier, until it began selling flights at such a low cost that it could no longer pay to maintain business. Like Movie Pass, it was a good idea—until it wasn’t.
How It Happened
WOW Air has been struggling for quite some time. In November of last year, the company announced that it had been considering bankruptcy. In an effort to conserve costs as much as possible, it ceased operations in a number of US and European cities. The initial cancellation of flights in cities like Chicago left passengers stranded, without an affordable flight option to take the place of WOW Air’s mistake.
That was just the beginning of the airlines troubles. As of this week, the airline has officially ceased all operations worldwide and will no longer be selling its dirt-cheap flights in and out of Iceland. In a statement posted to the carrier’s website, the company announced that only some tickets will be eligible for reimbursement.
Skúli Mogensen, the CEO of WOW Air, claims that negotiations to save the airline went on for hours late Wednesday into early Thursday. Unfortunately, there’s no saving WOW Air. The closure impacted nearly 1,000 passengers worldwide.
Now What?
WOW Air proved that there is a market for budget, no frills airlines around the world. What those airlines tend to lack, though, is a good customer experience. Frustrating booking sites, limited customer service, and bad customer experiences at check-in can negatively impact how profitable an airline is today. It’s not just about providing a way to get from A to B. It’s about creating an experience that someone will want to come back to.
Janelle Estes, the Chief Insights Officer over at User Testing can attest to this. “It’s no secret that airlines have their fair share of issues – from folding to grounding planes and stranding passengers – a handful of airlines have seen negative press as of late,” said Estes in a statement. “However, there are some airlines that are making moves to help ensure they remain not only in business, but profitable. What are these airlines doing differently? They’re focusing on the customer experience and looking for ways to connect with their customers on a human scale,” she continued.
User Testing released a survey on Thursday that proved that consumers feel that experience often trumps value. Many airlines are working toward meeting these standards, but not all. Budget, no-frills carriers may be a seemingly easy way to get to a new destination. But with the added costs and potential cancellations, are they worth the hassle?
