Wow Air has ceased all operations, cancelling all of its flights and leaving thousands of passengers stranded.
In the early hours of Thursday morning the Icelandic airline said it had halted all flights while completing an agreement with a group of investors over raising new funds.
But the carrier, which connected Europe and North America via Reykjavik, with UK flights serving London Gatwick, London Stansted and Edinburgh, later annouced it had “ceased operations”.
The company said in a statement: “Passengers are advised to check available flights with other airlines.
“Some airlines may offer flights at a reduced rate, so-called rescue fares, in light of the circumstances.”
It added: “Passengers may also be entitled to compensation from Wow Air, including in accordance with European regulation on Air Passenger Rights.
“In case of a bankruptcy, claims should be filed to the administrator/liquidator.”
A woman, who asked not to be named, was due to fly home from Berlin, Germany to Toronto, Canada on Saturday.
She said: “I have yet to receive any formal indication from Wow, and only a few days ago they emailed me to see if I wanted to upgrade my flight. So now I have paid for a return flight home that no longer exists. I still can’t believe it.
“I’m now scrambling to find a flight that same day. It’s last minute so the prices have skyrocketed and I don’t imagine I’ll be getting a refund from Wow.”
Many stranded passengers wrote on Twitter, voicing frustration and appealing to other airlines to help them reach their destinations.
The airline was due to operate two flights between London Gatwick and Iceland on Thursday, and was set to switch all its London flights to Stansted from Sunday.
It also planned to fly a summer service between Edinburgh and Iceland from June and once advertised flights between London and New York for £99 each way.
Karl Turner MP, shadow minister for aviation, said: ”This is another blow to the aviation sector following the collapse of Flybmi earlier this year.
“The government’s priority should be making sure that affected customers can get back to the UK as quickly as possible and are fully compensated for any losses they have incurred.”
A number of airlines have suffered financial troubles in recent months, partly due to increased fuel costs and competition.
Two budget carriers – Primera Air and Cobalt Air – collapsed in October.
Flybmi went out of business in February, while the cut-price sale of Flybe to a consortium consisting of Virgin Atlantic, Stobart Group and investment firm Cyrus Capital was recently completed.
Wow Air was founded by entrepreneur Skuli Mogensen and began flying in 2012.
During the past six months the low-cost airline has been involved in turbulent negotiations over a potential sale, first to Icelandair and then to US-based private equity firm Indigo Partners, which has stakes in several other airlines including Wizz Air.
The Association Press reported that Mogensen wrote a letter to employees on Thursday which stated: “I will never forgive myself for not acting sooner.”
He added: “Wow was clearly an incredible airline and we were on the path to do amazing things again.”
Rory Boland, editor of Which? Travel magazine, said: “Passengers will quite rightly be appalled that Wow Air was still selling tickets right up to the moment it collapsed, knowing full well that any tickets sold would likely not be worth the paper they are printed on.
“You will need to check if you booked your flights as part of a package as this will mean you are Atol-protected and will be entitled to your money back.
“If not, you may still be able to claim through your travel insurance or card issuer but it will depend on your circumstances. You can visit which.co.uk for more advice on your rights.”
