WOW Air, the Icelandic carrier that made a name for itself by offering budget flights to North America, has ceased trading, ruining the plans of thousands of travellers.

The low-cost airline had faced months of financial uncertainty but the situation came to a head this week when the carrier cancelled dozens of flights as it made a last-ditch attempt to raise funds from investors. On Thursday morning it posted a notice on its website explaining the situation and warning that flights would be suspended “until documentation with all parties involved have been finalised”.

But this was soon replaced with a statement reading: “WOW Air has ceased operation. All WOW Air flights have been cancelled”....