On Tuesday, WOW Air announced that, for a limited time, it will offer tickets from the West Coast of the United States to Europe of as low as US$69.99 (AU$94).
The Icelandic low-cost carrier will offer the fares on flights from Los Angeles and San Francisco to Stockholm, Bristol, Copenhagen, and Edinburgh.
The $69.99 fare is available for one-way flights between January 15 and April 5, 2017.
“WOW Air’s goal is to enable everybody to fly by offering the lowest fares on the market,” airline founder and CEO, Skúli Mogensen said in a statement.
“I am very proud that by offering $69.99 USD fares we are enabling thousands of people to travel that otherwise could not afford it.”
WOW’s announcement beat fellow European low-cost carrier Norwegian Air to the punch. The Scandinavian airline is expected to launch $69 trans-Atlantic flights later this year when it takes delivery of new Boeing 737MAX airliners.
In addition, WOW also announced the introduction of US$99 (AU$133) fares from Miami and Boston to Iceland.
The West Coast flights will be operated using Airbus A330 wide-body jets while flights out of the Northeast will use narrow-body Airbus A321s
In the announcement, WOW clarified that the sale prices represent the lowest discount fares offered by the airline. Which means, not every seat on the plane will be available at that price point. However, WOW will make as many discount seats available as the airline’s revenue management will allow, Mogensen told Business Insider in a recent interview.
WOW’s low price strategy means passengers will have to do without some of the amenities traditionally included in a ticket. Everything from bottled water to checked bags costs extra. Due to low usage rates, the airline declined to install WI-FI equipment on any of their aircraft.
That’s because WI-FI equipment is not only expensive, but it’s also very heavy, Mogensen said. As a result, his decision to forgo WI-FI not only cut down on the initial price of the planes, it also helps the airline cut down on fuel costs.
WOW is pretty open about their keen eye on the bottom line and lack of frills.
“You have to be up front with your customers. This way, you won’t have problems with expectations,” Mogensen said. “They will know ahead of time there is no free food, water, IFE, or WI-FI. That’s why we tell them to bring their own food, water, and download a movie on your iPad or laptop ahead of the flight.”
With that said, Morgensen believes air fares could one day, in fact, be free — or at least, close to it. According to the tech entrepreneur-turned-airline-boss, the industry is headed in a direction where air fares may no longer serve as the primary means of income. Instead, revenue from ancillary fees along with travel expenditures such as hotel bookings, dining, and rental cars could become the main income drivers. In return, airlines will use cheap flights as a loss leader to get customers in the door.
But two things the CEO won’t skimp on are service and safety. And in regards to his airline’s service culture, Mogensen said, “It doesn’t cost money to smile.”
WOW, which was founded in November of 2011, has grown considerably over the past few years. In 2016, the airline transported as estimated 1.6 million passengers. Mogensen expects that number to reach 6 million by 2020.
In total, WOW’s fleet will boast 17 new Airbus A320-family and A330 airliners by the end of the year. By 2020, Mogensen hopes to expand the fleet to as many as 50 aircraft. This would provide the airline with an added measure of stability and allow WOW to take advantage of some economies of scale.
However, Mogensen added that if he’s learned anything from his time in the tech industry, it’s the fact a company and its managers must stay nimble and willing to adapt to the times.
“In today’s world it’s important to be constantly willing to change, and review and challenge yourself,” he said. “What works today won’t necessarily work tomorrow. Change is never ending. There will always be new competitors, new situations.”
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