WOW Air Collapse Will Dent Iceland's Growth and Cause Losses for Banks

The collapse of budget airline WOW Air last month will dent Iceland’s economic growth this year and cause some losses in the banking system, the country’s central bank said in a Financial Stability report on Thursday. WOW Air, which had 1,000 employees, halted operations and canceled all future flights on March 28 after efforts to raise more funds had failed, Reuters reported. It was the latest budget airline to collapse as the European airline sector grapples with over-capacity and high fuel costs. Recent failures include Britain’s Flybmi, Nordic budget airline Primera Air and Cypriot counterpart Cobalt. Iceland’s central bank said that although WOW Air’s collapse would cause some losses in the banking system the direct impact on the country’s systemically important banks would be limited. Read more