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Icelandic Airline Wow Air Collapses and Cancels all Flights:
Iceland's low cost carrier Wow Air has canceled all flights and told passengers to book with other airlines.
Its website has a travel alert that begins: "Wow Air has ceased operation. All Wow Air flights have been canceled."
The alert said people who wanted to travel should now look for "so-called rescue fares" which may now be offered by rival airlines.
Wow added that those who made bookings by credit card or via a European travel agent should try to get their money back through those businesses. It said some passengers may be entitled to compensation from the airline itself.
[...] 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.
You don't always get what you pay for, but you generally do not get what you do not pay for.
(Score: 2) by sjames on Saturday March 30 2019, @06:12PM (8 children)
A business venture failed. It happens. It's unfortunate for the people in the venture, but it happens.
The real issue here for the rest of us is that people showed up at the gate with pre-paid tickets in hand, some of them for a flight home, and no airplane showed up. No offer of a refund appeared. They didn't even send a representative around to put a poster on the wall letting people know there would be no flight.
Then they suggest getting others to refund the ticket price, apparently with no intention or ability to pay those others either. But in the meanwhile, their suggestion for people stranded far away from home? Go begging and spend money you don't necessarily have.
(Score: 0) by Anonymous Coward on Saturday March 30 2019, @11:44PM (7 children)
Who the fuck cares what they say. Dispute the WOW charge on your credit card, then buy a return ticket home with your card. Maybe with a carrier that is not likely to die before they take you home.
Before anyone laments that they have nothing to their name anymore, what the fuck are you doing flying intercontinentally in such a precarious position that one carrier failing you puts you in dire straits?
(Score: 2) by sjames on Sunday March 31 2019, @03:22AM (6 children)
Disputing the charge is an excellent idea, but it won't necessarily credit your card right away. But the point is, the airline SHOULD have the money to do the refund since it didn't expend resources for the already paid for flight. If it doesn't, either the customer or their credit card will get stiffed. Same for the travel agencies.
(Score: 0) by Anonymous Coward on Sunday March 31 2019, @03:48AM (5 children)
Not really, if they declare bankruptcy, an administrator gets to decide when and how to dispose of any funds. And a consumer is a bit further down the list in priority. GE Leasing will probably get its due first.
You don't think the credit card companies will settle for getting stiffed. Likely they will have forced Wow to buy a bond to insure any chargebacks go through.
Maybe them, but do travel agencies still exist? In any case, I don't think they ever booked flights on discount carriers, at least not here.
(Score: 2) by sjames on Sunday March 31 2019, @05:54AM (4 children)
Since WOW suggested getting a refund from the travel agent, it seems likely there are some who did booj flights on Wow. Of course, they were talking about European travel agents, so there may be none in the U.S.
But they didn't just wake up one fine morning thinking everything is fine, read a report with the bad news, poof the paper work into existence and suddenly declare bankruptcy. At some point, they were accepting payment for flights they knew there was no way in hell they were going to be able to fulfill. They could have at least completed the return flights.
(Score: 0) by Anonymous Coward on Sunday March 31 2019, @03:49PM (3 children)
Well, for every person on a return flight, there will be passengers outbound, so there isn't an option of "dropping off passengers at home". The lessors of the planes would be pissed that their equipment is getting used without pay, and the bankruptcy administrators would not permit it anyway. Doing it before the filing would not be a fiducially responsible action.
Bankruptcy fraud is a serious crime, in addition to possible civil liability for the leadership. The process to declare bankruptcy to not run afoul of these risks is a well-trod area of law. They had probably seen that the signs were not good, and set out a condition after which continuing to run the business would be criminal and expose them to liability. That condition happened, they filed for bankruptcy and the rest will be for the administrators to figure out.
(Score: 2) by sjames on Sunday March 31 2019, @05:33PM (2 children)
Meanwhile, those little nobodies who had the nerve to actually support the airline by buying tickets can just go fuck themselves like the worthless sacks of shit they are, AMIRIGHT?!?
(Score: 0) by Anonymous Coward on Monday April 01 2019, @01:06AM (1 child)
No, they can get in line. In the US, the priority is given in 11 USC 507. Let's look at this for a non-personal bankruptcy: From the top, the assets that Wow leased are going back to the lessors. No reason they should not make money with their property. For distribution of company assets, first in line will be the bankruptcy administration itself. They wouldn't work for free. Then it is employees and suppliers for moneys owed to them (capped at $10k). I hope you will see that it is equitable that regular workers have high priority. Then the retirement benefits of the employees. Now it's the turn of people who paid for services received.
This is how it goes in the adult world. Our capitalist society has set up a balance of creditor protections vs the ability of businessmen to take a risk. The debtor's business may fail, and creditors may get pennies on the dollar. However, fraud commited by the debtor is punishable. Arguably, this freedom to do business by soliciting other people's capital is the base of the wealth and progress of first world countries.
Adverse events happening is a risk we all face, and you fail to deal with them at your own peril. You could blow out a tire on the road, and you had better maintained your spare. You could pick a flight and go "ooh, only $200 to Thailand", but if the company fails, you have to do the needful to get yourself back home again. Could have picked the $800 flight, but you are never free of risk.
Anyway, the process is simple if you paid by credit card, so it's not even worth getting excited about.
(Score: 3, Insightful) by sjames on Monday April 01 2019, @02:20AM
Much older rule, don't leave people stranded. I'm not talking about bankruptcy law, I'm talking about common decency. They can't have NOT known they were going bankrupt when they took people's money and flew them a thousand miles from home with the (empty) promise of a return flight. The people who were stranded accepted their offer in good faith even though the offer was made in bad faith.
They could have made alternate arrangements to get their passengers home BEFORE they signed the bankruptcy papers. They could at least have refunded the tickets, then signed the papers.