For the last several years fares between the US and Europe have been available at incredibly low prices, driven down by a generation of ultra low cost carriers — deep discount airlines no longer just flying short haul routes, but operating across the Pond the way that Freddie Laker’s Skytrain service once pioneered.
There have been too many players flying too many seats at too low a price for too long, in a market that’s long been challenging, and airlines trying to make it in this environment have struggled.
- Primera shut down
- Norwegian was near collapse at the end of 2018.
- Wow Air began cutting routes before then looking for a partner to throw it a lifeline.
Wow Air, Copyright: zhukovsky / 123RF Stock Photo
It looked like Icelandair might acquire Wow Air, saving the carrier but also consolidating the low cost transatlantic carrier market and bringing about higher fares. No deal was agreed to, however.
Wow Air sold planes to stay afloat. Then with the expectation that Indigo Partners would invest they ran a huge fare sale. The question is, for folks who bought travel into the future, will the airline be around to fly?
The Indigo deal came with harsher conditions than Wow Air realized and they couldn’t come to a deal. Icelandair jumped back into the mix but now says no deal could be reached and talks have concluded. (HT: One Mile at a Time)
The era of $49 one way fares between the US and Europe has been richly rewarding for consumers but hangs in the balance. Betteridge’s law of headlines states “Any headline that ends in a question mark can be answered by the word no.” In this case, however, that would be too optimistic by far.
Update: Wow Air will have a statement on Monday and is in discussion with creditors over a possible debt-equity swap.