Calls for airlines to require bonding to protect customers after Wow Air collapse

The collapse of Icelandic airline Wow Air has sparked renewed calls for all travel providers to require bonding in order to prevent holidaymakers being left out of pocket.

The troubled airline had previously said it was in the "final stages" of completing an agreement with investors over raising new funds, and that flights were "postponed" until the deal was completed, before announcing on Thursday morning that it has ceased operation.

Wow Air continued to accept bookings on its website until its closure. It had offered low fares between Europe and North America via its Icelandic hub near Reykjavik, including flights to and from Dublin.

Thousands of passengers who had booked flights have been left stranded by the closure, and concerns are growing that some will now be left without refunds.

While holidaymakers who booked tickets via credit cards have been told they may be able to cancel the transaction, and passengers who either have travel insurance or secured their seats via a bonded travel agent have some recourse, others could be left out of pocket.

Wow Air itself said that passengers may be entitled to compensation but added: "In case of a bankruptcy, claims should be filed to the administrator/liquidator."

During the past six months the budget airline had been involved in negotiations over a potential sale, first to Icelandair and then to US-based private equity firm Indigo Partners.

The Commission for Aviation Regulation (CAR) is advising those who did not purchase their ticket as part of a package that they can self-repatriate by booking directly with other airlines. Some airlines, including Aer Lingus and Ryanair, offer rescue fares in certain circumstances.

The Irish Travel Agents Association (ITAA) has warned that holidaymakers who have not booked through a bonded travel agent will have limited recourse and may not receive repatriation.

It said it has repeatedly called on the Government to review the legislation around bonding among travel providers in Ireland. John Spollen, ITAA president, said:

The ITAA have been pushing for a collective bond among all travel agents, tour operators, and airlines and have contacted the Minister for Transport, Tourism and Sport many times about this issue.

“As airlines are among the largest travel providers in Ireland, we believe it is necessary that they, along with all other travel providers, be bonded in order to protect Irish consumers.

"Undoubtedly, the sudden cancellation of flights is causing disturbance to travellers booked with WOW Air and we are advising any affected Irish holidaymakers to get in touch with their travel agent, who can assist with arrangements for alternative travel,” he said.

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