Why passengers stranded by the collapse of Wow Air will likely never see a refund from the airline

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• Icelandic ultra-low-cost airline Wow Air ceased operations on Thursday, stranding hundreds of passengers around the world.
• Wow's shutdown also leaves those who have upcoming reservations with the airline stuck without flights.
• According to AirHelp CEO Henrik Zillmer, passengers shouldn't count on refunds from the airline as these claims are the last to be paid out in bankruptcies.

Icelandic ultra-low-cost airline Wow Air ceased operations on Thursday, stranding hundreds of passengers around the world. Wow's shutdown also leaves those who have upcoming reservations with airline stuck without flights.

Unfortunately, they will likely be out of some money as well as refunds directly from the airline are exceedingly rare.

"Passengers should not count on assistance or refunds from Wow Air," said Henrik Zillmer, CEO of AirHelp, a company that helps passengers claim compensation for canceled or delayed flights.

"Claims are usually the last items to be paid out in bankruptcy estates," he told Business Insider.

Instead, financial experts advise travelers to seek refunds through their credit card companies and for those fortunate enough to have travel insurance, the insurance company.

Read more: Wow Air declared bankruptcy and canceled all of its flights - here's how travelers can get their money back.

"The best chance consumers have for getting their money back hinges on whether they purchased travel insurance, or purchased their tickets with a credit card that offers travel insurance," NerdWallet personal finance expert Arielle O'Shea said in a statement to Business Insider. "Travel insurance may cover financial insolvency or bankruptcy. You typically must file a written claim within 60 days of the incident, and be ready to show all receipts and the cancellation notification from the airline."

"It's a tedious process that won't resolve the issue overnight, but it's worth it to recover the ticket cost," O'Shea added.

Read more: Wow Air has shut down. Here's what went wrong, according to the company's CEO.

Wow Air ceased operations following failed attempts to secure investment from Icelandair and private equity firm Indigo Partners. Last year, the airline laid off 111 employees and dumped its fleet of Airbus A330 widebody airliner in an attempt to reduce costs.

During the first nine months of 2018, the airline's losses more than doubled to $33.6 million from $13.5 million from the same period in 2017 even as revenue surged by 31% to $501 million.

David Slotnick contributed to this story.