WASHINGTON – A purple Airbus jetliner with bright white lettering sat in silence in a dark corner of Newark Liberty International Airport.
Another was parked at Baltimore Washington International Thurgood Marshall Airport.
The idle jetliners are remnants of Wow Air, which closed suddenly a week ago, stranding passengers on both sides of the Atlantic.
The abrupt termination of service raised questions about why U.S. regulators permitted an international airline in a fragile financial state to continue collecting money from unknowing travelers.
“I am troubled that an airline was operating on such close margins that it went out of business literally overnight,” Rep. Elijah Cummings, D-Baltimore, the chairman of the House Oversight and Reform Committee, told Capital News Service in a statement. “I certainly urge the Department of Transportation to examine whether stronger consumer protections are needed to ensure that U.S. travelers are not stranded or swindled by low-budget foreign carriers.”
Sen. Chris Van Hollen, D-Maryland, also called for a review of the closure and steps to prevent similar endings by other carriers.
“Stranding passengers at the airport is not only inconvenient — it’s unacceptable,” Van Hollen said. “I’m deeply disappointed in Wow’s lack of notice to its passengers, and I hope our agencies and airports will work to prevent issues like this in the future.”
Despite several indicators that the airline was failing, the Iceland-based carrier was allowed to continue flights to and from the U.S. without question or investigation up until the night of its sudden closure.
Jol A. Silversmith, a lawyer on airline policy and consumer protections, said the Department of Transportation takes a very “hands-off approach” with foreign airlines like Wow Air.
While airlines like Wow initially must prove financial competency to begin landing on U.S. soil, the DOT will not usually monitor the financial status of the airline as time goes on, Silversmith told CNS.
The DOT says on its website that it checks in periodically on the financial fitness of U.S-based airlines. But the agency says nothing about watching over foreign airlines.
Silversmith argued that investigations from the department into airline finances are uncommon at best and rare at worst.
When asked if this was true, a DOT spokesperson agreed about the initial test, but did not address questions about the lack of follow up investigations.
“The Department makes fitness findings in licensing foreign air carriers and did so in licensing Wow,” said a department spokeswoman who declined to be identified for this story.
Wow Air displayed multiple warning signs before its eventual closure, none of which apparently warranted a look by the DOT.
As early as 2014, the company started to lose money, according to Icelandic news outlet, the Reykjavik Grapevine.
In 2017, the company lost $45 million and soon after went on the prowl for potential buyers. After two failed mergers in 2018, and another $184 million lost, the company finally folded as aircraft owners demanded the return of their planes, the Reykjavik Grapevine reported.
Still, Wow Air was allowed to fly in and out of the United States, putting thousands of American customers at risk of being stranded without ever notifying them that operations could end at any hour.
Other low-cost airlines could also be at risk, but there is little likelihood that the DOT would respond in a different manner, according to Silversmith.
That’s because the laws regarding airline regulation do not require federal regulators to monitor regularly the financial fitness of foreign-based airlines.
Regardless of what caused the stranding of passengers – legal loopholes or lack of investigation – Silversmith said that U.S. regulators favor a competitive market for airlines more than a safe one. Fewer restrictions mean more competition, even if some of the companies end up less financially stable than others, he said.
“We encourage carriers to enter market, but many haven’t survived,” Silversmith said.
Laker Airways – a pioneer in the cheap flights industry in 1966 – “was perhaps the first example of a low cost airline entering the market and perhaps the first example of a low-cost airline exiting the market.” Laker folded in 1982.
Rep. Anthony Brown, D-Bowie, who serves on the House Transportation and Infrastructure Committee, did not respond to a request for comment on whether he thinks the DOT should change its oversight of low-cost foreign airlines.
The chairman of that panel, Rep. Peter DeFazio, D-Oregon, also did not respond to a request for comment.
“The takeaway is that low-cost airlines provide a good bargain, but they are often new entrants in the market, without deep pockets, so it is important for people to have travel insurance and alternate plans if something goes wrong,” Silversmith said.
Earlier this week, another low-cost international airline, British carrier Flybe, suspended dozens of its operations in Europe. That airline does not serve the United States.