Posted by: neilh10 | October 27, 2012

ICELAND EXPRESS: RIP

Earlier this week, the news broke that Iceland express, Iceland’s first and notoriously unreliable low cost airline has finally collapsed, being taken over by wow air, its upstart competitor formed earlier this year by a former Iceland Express CEO.

As readers of this blog will be aware, this is hardly a surprising development. IEX’s operations have always been mired in mystery and characterised by a tendency towards last minute changes, most notably this time last year when it cancelled its flights to the US with immediate effect, leaving passengers confused about what this would mean for them (what it did mean, in fact, was that you need to call up the call centre who would rebook you on Icelandair, presumably at enormous cost to the airline). 

What appears to have happened, in so far as I can work out, is that wow air have essentially bought the rights to IEX’s future booking sheet and flight schedule, meaning that if you booked on IEX, you will basically travel on wow air instead. They have not actually taken over IEX in its entirety, who presumably have significant obligations not least to their employees and to Czech airlines, who were contracted to operate the flights for them. (Indeed, both airlines are in many ways just internet ticket booking agencies, they have never actually flown any planes in so far as I understand it). Looks like a nice mess for the lawyers to pick over. 

The end of IEX is no great disaster for consumers. The flights were often late and the legroom was often abysmal. However, they were also a very cool airline. The flight attendants (for some reason there were six, three from Czech airlines and three icelanders) would, for instance, give out free beer because they didn’t think it was cold enough. They also had a very liberal policy towards luggage and the fact that the legroom was abysmal hardly mattered, because most of the time the flights were less than half full. They had nice touches like branded cushions and blankets. Oh yeah, and their internet booking system was totally disorganised – you could easily predict when the low prices would come up. They even did things like refund your ticket when you decided that you didn’t want to go anymore. 

It’s no great disaster, because wowair are basically the same company, and I strongly suspect they will have the same attitude. However, given the introduction and strength of the competition, I have doubts as to whether even WOW Air can survive against competitors like Norwegian and easyJet who have far greater economies of scale and much lower running costs. We’ll see.  

 

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