WOW air is cutting even more routes between the U.S. and Iceland as it sells off nearly half its fleet in a desperate bid to stay afloat.
The ultra-low-cost carrier grew ultra fast, opening up more than a dozen routes between U.S. cities and its Reykjavik (KEF) hub, and onward to Europe with dirt cheap fares. But clearly, it wasn't sustainable. WOW is losing money, cutting routes, and hoping to be rescued by a private equity firm.
We noted yesterday that WOW air appeared to be temporarily shutting down flights between Chicago-O'Hare (ORD) and KEF – just the latest in a string of cuts to its flight network. But that was just the tip of the iceberg. The situation is far more dire.
The airline said late Thursday that it was cutting its fleet from 20 aircraft to just 11, getting rid of its last widebody Airbus A330s – planes it needs for longhaul flights to U.S. destinations on the West Coast. WOW laid off 111 full-time employees and will cut more routes from its schedule starting sometime in January.
The airline didn't specify which routes are on the chopping block. But flights from Los Angeles (LAX), San Francisco (SFO), Vancouver (YVR), and of course ORD are no longer bookable online. They all show as sold out starting in late January or early February.
WOW got a lot of attention back in May when it announced service to New Delhi, India (DEL), with flights from the U.S. starting at just $199 each way. Those flights launched just last week, but the airline needs a long-haul plane to make the flight from Iceland. It appears flights to India have been canceled starting in January, too.Â
“This is the most difficult day in the history of WOW air, ” CEO Skuli Mogensen said in a statement. “However, in order to ensure our future and preserve WOW air in the long run, we unfortunately must take these drastic measures.”
Our Analysis
WOW air has had so many twists and turns, it's been difficult to keep track. But one thing is now clear: This is dire.
After some rapid expansion, the airline has now canceled flights to and from nearly 10 U.S. cities, including Cleveland (CVG), Cleveland (CLE), St. Louis (STL), New York City-JFK (JFK), and more.
If you're booked on a WOW air flight departing any of the cities WOW looks to be cutting service – or any U.S. gateway, really – it's time to plan for alternatives. Look into refund policies or any trip insurance offered by the credit card used to book.
WOW says it will contact passengers booked on flights that will be affected by the changes, but it's better to get ahead of this.
By selling off aircraft and scrapping routes, WOW air is trying to buy time. Indigo Partners, a private equity firm behind Frontier Airlines and several other ultra-low-cost carriers worldwide, lined up to invest in WOW after Icelandair backed out of a takeover bid.
But that deal hasn't wrapped up yet, and clearly WOW doesn't have the resources to carry out its current schedule until it does. And even if it does, there's no guarantee WOW will rebuild its U.S. operations.
Bottom Line
WOW air's days seem to be numbered. If you're booked on a flight with the airline, start considering alternatives before it's too late.
Lead photo credit to Nicky Boogaard via FlickrÂ