Keflavik Airport: the failure of WOW Air & where to now for Icelandair

The sudden collapse of WOW air, the LCC that took on Icelandair at its own game and lost, is likely to prompt a review of infrastructure needs at Keflavik Airport, which is the only international air gateway to the island.

The state airport operator Isavia has been criticised for its tardiness in preparation for the anticipated continuing increase in tourists especially, but WOW air's collapse will take plenty of the sting out of that. Isavia says it will be examining the consequences that WOW air's withdrawal may have.

Isavia had predicted that there would be a fall in passenger numbers brought about by route consolidation alone this year (10% in the summer), and early statistics (Jan-Feb, around 6%) have supported that prediction, although not quite to the degree that Isavia imagined.

This collapse also prompts the question which airline(s) - if any - will take up WOW air's capacity and fly its routes, and whether the entire aviation/tourist enterprise of Iceland might start to head back towards the 'niche' territory where it contentedly sat for decades.