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WOW Air is going to India after running out of places to fly across the Atlantic

WOW Air is one of the fastest growing ultra-low-cost carriers (ULCC) disrupting air travel across the Atlantic. Through its geographically convenient hub in Reykjavik, Iceland, WOW Air connects North American cities with popular European destinations at incredibly low fares. WOW Air mostly operates a variety of A320 family aircraft (along with a few A330s to the West Coast), leveraging the short distance between North America and Iceland to operate with lower costs and on thinner routes than competitors.

Today, WOW Air serves over 38 destinations in Europe and North America. WOW Air’s expansion has been so widespread that secondary U.S. cities such as Pittsburgh and Cincinnati, traditionally afterthoughts in the transatlantic market, are served by WOW during the busy summer travel season.

Due to its major expansion, WOW Air is running out of places to connect across the Atlantic. And now it’s trying to create an entirely new traffic funnel: this time to India.

WOW Air plans to serve New Delhi (DEL) from Reykjavik 3x weekly beginning December 5th, 2018. Service to DEL will be available from Newark Liberty International Airport (EWR), Boston Logan International Airport (BOS), Baltimore/Washington International Airport (BWI), Chicago O’Hare International Airport (ORD), Pittsburgh International Airport (PIT), Detroit Metropolitan Airport (DTW), San Francisco International Airport (SFO), Los Angeles International Airport (LAX) and St. Louis Lambert International Airport (STL). Promotional fares start at $199 one-way in economy and $699 in premium economy. In a ploy to lure business travelers, WOW Air has introduced premium economy, which features 37 inches of pitch and more amenities built into the fare compared to the bare-bones economy offering. Premium economy is only available on WOW’s brand new A330-900neo aircraft.

With four A330neo aircraft on order in a two-class configuration, WOW Air CEO Skúli Mogensen had previously indicated he was interested in expanding outside of the transatlantic market. There are many reasons for WOW Air to choose India for its next expansion.

The current U.S. – India market, replete with high fares and a lack of options, is ripe for disruption. The market is loaded with expensive full-service carriers and multiple layover itineraries. United and Air India are the only airlines that serve India nonstop from the United States. Delta recently announced it is entering the market as well, although it did not specify from which city. The Gulf carriers also play a significant role herding passengers through their mega hubs in Dubai, Doha, and Abu Dhabi. Major European airlines like British Airways and Lufthansa also have a share of the market.

While WOW Air is not the most convenient option in terms of total trip time or arrival in Delhi, it is the cheapest. In most markets, WOW Air significantly undercuts other airlines, especially in the Midwest and on the West Coast.

Note: All fares were accessed on June 22nd on Google Flights

Chicago

December 5th one-way:

December 19th one-way:

 

San Francisco

December 14th one-way:

 

And in some markets it is one of the only single ticket operators:

 

St. Louis

December 14th one-way:

 

Pittsburgh

December 14th one-way:

 

Only in the New York market, where there is a significant Indian population, does WOW Air face competition:

 

New York City

December 5th one-way:

December 19th one-way:

 

Since South Asian Americans are one of the fastest growing demographics in the U.S., demand certainly exists.  And with its trademark low fares, WOW Air could bring an entirely new swath of travelers into the market, similar to what low cost carriers (LCC) have done in other regions.

The airline’s current model is heavily seasonal with leisure travelers packing planes during the summer months. Flights to India would provide WOW Air with a consistent funnel of traffic, independent of the wild seasonal fluctuations characteristic of the transatlantic leisure market.

But there are still some unanswered questions. Even with the most fuel-efficient aircraft, the LCC model so successful on short-haul routes begins to break down when heavy aircraft and long flights are involved. Due to longer flight times, there is less cost differentiation between LCCs and traditional airlines over the course of an operational day. While a short haul LCC may be able to turn its planes around a lot faster than a legacy carrier leading to higher utilization over the course of the day, a low-cost long-haul carrier does not have that luxury due to the long flight times.

Many pioneers of the low-cost long-haul model are currently struggling. Buyers are circling financially challenged Norwegian, which operates 787s across the Atlantic. On the other side of the world, Air AsiaX, which planned a significant push into Europe and the U.S. from Southeast Asia with A330ceo and neo aircraft, has pared back its plans considerably.

While WOW Air does have the advantage of using narrowbody aircraft on the U.S. – Iceland leg, there are still questions over the viability of a widebody long-haul low-cost model on the Keflavik to DEL segment. The big question will be if WOW Air can lure business travelers with its premium economy offering, which would increase revenue per passenger while offsetting its decreased cost advantage.

But if we have learned anything from WOW Air’s recent rapid growth, CEO Skúli Mogensen is eager to grow WOW Air into a worldwide behemoth. Global carriers are now on watch.

3 Comments

  1. Eric G Eric G

    The London to India market is huge. I wonder if WOW has any specific plans to use an A330 between London and Iceland, before going on to India?

    • Theo Nichols Theo Nichols

      Interesting enough WOW Air is offering LGW-DEL. However, it’s a 31 hr itinerary with a 21hr overnight stopover in KEF. And there are a ton of better options to India out of London that are just as cheap so I do not think it will be a very big market for WOW.

      WOW Air currently operates A320s from London Gatwick and Stansted to KEF.

  2. Jeremy Jeremy

    All I can say is WOW!

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