Published April 15, 2019

The Icelandic tourism has been almost unbelievable. Iceland has gone from a couple of hundred thousand tourists to 2.1 million travellers within a decade. This development is one of the key factors in iceland’s quick recovery from the total collapse of its banking sector in 2008.

We literally struck gold. And we are thankful for that.

But—just like the heyday of Icelandic banking—tourism has grown incredibly fast, and become a huge part of our economy in an eerily short amount of time. So it had quite an impact when WOW Air went bust. The low-budget airline held 30% of the Icelandic market, so it was clear that the airline’s failure would have a huge impact on the country, from WOW staff, to travellers having their plans interrupted, to the travel industry at large, and the cancellation of Sónar Reykjavík 2019.

But there’s also good news. There are still 27 airlines that fly to and from Iceland. Experts say the impact of WOW’s collapse will be short term. Around 2000 people have already lost their jobs, almost all of them directly linked to the airline in one way or another. More jobs will be lost in the restaurant industry and other related industries—even small magazines like The Reykjavík Grapevine will have to fight for their lives. But Iceland has always had a very low unemployment rate, and it was historically low just before WOW Air crashed. So we expect to be back on our feet quickly. We’ll be fine.

A bitter taste

Still, the WOW’s bankruptcy leaves us with a bitter taste in our mouths. It’s almost too similar to  the banking system collapse. The owner of WOW Air flew too close to the sun—while the government watchdogs slept. They were overconfident that this would resolve on its own and allowed a shaky company with an overconfident CEO to continually overreach until it became a threat to national interests. At its core, it’s exactly what happened with the banks in the lead up to 2008. 

Perhaps the bankruptcy of WOW Air was a necessary wake up call. A harsh one, sure, but the travel industry is still here, and it will continue to grow in the coming years. But we need to learn from our mistakes and stop letting overconfident CEOs rule our economy—or even destroy it. 

With this in mind, we want to remind you that you can support The Reykjavík Grapevine by visiting our store at shop.grapevine.is, and our new travel market—gotravel.grapevine.is—where you can book tours all around the country. Also, if you like Youtube, subscribe to our channel, The Reykjavík Grapevine, for news, travel and all kinds of videos about Iceland.