Thursday 28 October 2021

Iceland's Wow Air plans trans-Atlantic expansion

LONDON, September 21, 2015

Icelandic low-cost airline Wow Air is in talks to buy two Airbus 321s which will help it add more trans-Atlantic destinations and increase its foothold in the low-cost long-haul travel market, chief executive Skuli Mogensen said.

The two planes, which will bring Wow Air's fleet to seven, will fly new routes to North America from next spring, adding to Wow's existing Boston and Baltimore Washington International destinations.

Budget airlines dominate short-haul flying in Europe, but have struggled to be financially viable on trans-Atlantic travel, where competition is already high and longer flying times mean fewer options to cut costs.

Wow Air flies via its Iceland hub between European and US cities, which means it can use smaller, cheaper planes than rival budget airlines.

"We will be adding a couple of A321s," Mogensen, also the founder and owner of Wow, told Reuters in an interview, declining to say who the airline was in talks with to buy them.

Wow is on track to be profitable in 2015 for the first time since it was established four years ago, he said.

Currently, low-cost airlines account for about 1 per cent of all trans-Atlantic flying, said Mogensen, a figure he expects to grow over time to eventually mirror the around 40 per cent market share low-cost carriers have in European short-haul.

Norwegian Air Shuttle, currently the main low-cost trans-Atlantic operator, uses large, fuel-efficient Boeing Dreamliners to keep fares low, offering direct flights between London and New York, and several other major US cities.

The chief executive of Europe's biggest low-cost airline Ryanair, Michael O'Leary, has also stated his intention of getting into low-cost trans-Atlantic in the future.

Canada's WestJet said this month it would offer low-fare flights between London and Toronto, Vancouver and other Canadian cities from next year.

Wow aims to grow its passenger numbers from 750,000 this year to up to 1.3 million in 2016 and 6 million by 2020.

Meeting that target would require Wow to operate more than 30 aircraft, he added, suggesting an acceleration in plane buying and requiring some external financing.

"It would be the prudent, correct thing to do, to bring in the right investor," he said, declining to give details on timing. - Reuters

Tags: airbus | Iceland | Wow Air |

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