Wow Air has gone out of business, stranding thousands of passengers including one Columbus family, and creating potentially huge risks for Iceland’s tiny economy and its growing reliance on tourism.

The discount carrier is the eighth European airline to have failed since the summer as margins are pinched by fluctuating fuel costs and over-capacity that’s sparked a continent-wide fare war.

The airline's struggles were magnified in October when it ended service at Cleveland Hopkins, Cincinnati/Northern Kentucky and St. Louis international airports.

Wow’s demise should bring short-term relief to local rival Icelandair Hf. Ryanair Holdings Plc, EasyJet Plc and Wizz Air Holdings Plc — Europe’s three biggest discount airlines — also fly to the island in the North Atlantic, whose popularity has grown exponentially in recent years thanks to television shows like Game of Thrones.

All 29 of Wow’s flights scheduled for Thursday were canceled and 2,700 passengers were asked to check with other airlines to get to their destinations. The government activated contingency plans and issued a statement seeking to offer reassurances about the consequences for the local economy.

“We have run out of time and have unfortunately not been able to secure funding for the company,” Chairman Skuli Mogensen said in a letter to employees. “I will never be able to forgive myself for not taking action sooner.”

Mogensen had been working furiously over the past months to save the airline he founded in 2011, holding talks with potential rescuers, including Icelandair and U.S. private equity firm Indigo Partners. This week, Wow bought time when bondholders agreed to convert debt into equity, and the airline reportedly proposed a $160 million turnaround plan. But plane leasing firms ultimately pulled the plug as they sought to place their aircraft elsewhere ahead of the start of the high season.

Scrambling to return

Wow’s abrupt closure stranded one Columbus bar owner in Iceland with his family, The Columbus Dispatch reported. Scott Ellsworth flew out of Detroit on Sunday to Iceland and is supposed to fly out of Iceland on Sunday. But how the family of four will get back to the United States is now a question.

“It sucks and there’s nothing we can do about it,” Ellsworth said. “It blows my mind that an airline can just close like that.”

Round-trip tickets were about $800 each to Iceland, he said. He has reached out to Icelandair about getting a new flight but hasn’t heard anything back. He called them but the line got disconnected so he also messaged them on Twitter.

He has tickets to the Indians home opener Monday against the Chicago White Sox at 4:10 p.m. so he needs to find a way to be back in the United States.

“We’re dealing with it,” Ellsworth said.

While the family waits to hear back about a flight out, Ellsworth said they plan on enjoying the rest of their vacation. So far, they have visited the Golden Circle and the Blue Lagoon.

“We’re just trying to go about our vacation,” he said. “It’s not a bad place to be stuck.”

Last-ditch talks

Shares in Icelandair shot up as much as 28 percent on Thursday's news.

Wow had earlier said it was in the “final stages” of raising new equity from a group of investors, telling passengers flights had been postponed until “documentation with all parties involved have been finalized.” But those talks ultimately failed.

Along with Icelandair, Wow has played a key role in the country’s decade-long boom in tourism, which is now its biggest export.

The closely held airline carried 3.5 million passengers last year. Its crisis has weakened the krona (the currency fell as much as 1.44 percent on Thursday alone), triggering cabinet meetings that saw the government rule out a rescue using taxpayers’ money.