The Icelandic government has announced that a contingency plan has been put into action following the news that WOW air has ceased all operations. Sigurður Ingi Jóhannsson, Minister of Transport, confirmed this earlier this morning. Part of the contingency plan, which was put into action last night, involved contacting Icelandair and EasyJet to ensure so-called rescue fares. “First and foremost I would like the chance to assess the matter, I’ll allow an interview later day. We have been preparing for this conclusion for a very long time,” Sigurður stated in an interview with Vísir.is.
The government released an official statement just now, stating that is disappointed that WOW air’s attempts to secure finances were unsuccessful. The government’s response team will try to ensure that passengers can travel home. The country’s economic standing is strong and the economy is in a good position to take on this challenge. The economic repercussions will mostly be short term and they call for a reassessment of plans, but the long term effects will be decided by market developments.
Jobs lost
It is believed that around 1100 WOW air employees lost their job today after WOW air stated it has ceased operation. It is unclear at this point in time how many other jobs will be lost, but it is clear that WOW air’s operations supported numerous other jobs in and around the Keflavík airport. The Directorate of Labour has formed an emergency response team to assist WOW air employees. The directorate has not yet received information from WOW air regarding a group resignation.
Icelandic Transport Authority
Þórólfur Árnason, head of the Icelandic Transport Authority, has stated that flight security was never in danger due to WOW air’s position and that the airline did well considering the position it was in. WOW air turned in its air operator’s certificate itself today, and Þórólfur believes that WOW air showed responsibility by doing so.
According to Þórólfur, just under a thousand people had booked flights with the six aircraft which were due to leave North America this morning. A similar amount of travellers had booked flights with WOW air with the seven aircraft which were due to leave Iceland today. Not all passengers are in the same position, however.
The International Air Transport Association has a contingency plan to assist travellers when aircraft carriers are in trouble. Other aircraft carriers can offer passengers so-called rescue fares to assist. Those passengers who booked their flights with credit cards should in most cases get their money back.
Economic repercussions
It is unclear at this point in time what effect the WOW air situation will have on the Icelandic economy and the tourism industry. Icelandic bank Arion Bank released a statement earlier today that the WOW air situation would not affect the bank’s earnings. Arion will be hit by one-time cost due to the position, and it is unclear at this point in time what that will amount to. The long-term financial goals of the bank will be unaffected.
