flights to Canada the start of a budget transatlantic revolution

flights to Canada the start of a budget transatlantic revolution

99 flights to Canada the start of a budget transatlantic revolution

Today it announces (and tickets go on sale at 8am, from 99) two new transatlantic routes to the Canadian cities of Montreal and Toronto all its transatlantic routes fly via the Icelandic capital of Reykjavik. The four times weekly flights will cheap jerseys operate from May next year.

“The conventional wisdom is that low cost, long haul doesn’t work,” says the airline’s founder and CEO, Skuli Mogensen. “We think it has never been applied properly. And we think the timing is now perfect.”

“Today’s traveller in Europe or the US is very well educated when it comes to the budget model. It is not a surprise to them that they are charged for their bag or for the food onboard, that they have to take care of themselves on the website. People are very comfortable with that.

“We’re just applying what’s been happening for 15 years to the long haul market.”

WOW Airlines CEO Skuli Mogensen

Mogensen founded the airline after seeing the market share that operators such as Ryanair and Easyjet were enjoying and recognising a gap in the market in Iceland. At the start of the decade, he says that low cost carriers had a 30 to 40 per cent share of domestic and inter continent routes in Europe, but only a 1 per cent share in transatlantic.

WOW dipped its toe into the US market last year, with flights to Washington and Boston, using flash sales of 99 fares to garner publicity. The seats sold out within days, both times, but Mogensen points to WOW’s more regular 150 odd one way fares as evidence that the airline is offering cheap seats on a day to day basis.

“We have a very tough boss it’s called the internet” says Mogensen. “If we are not delivering on our promise of having the cheapest flights, our sales simply drop to zero. There is no second place.”

“It’s really a binary situation, and as a result we have to continue to deliver on the promise. But this also means we have to be very cost conscious.

“We have to have low overheads, a disciplined operation, efficient aircraft, and load factors of 90 per cent plus.”

The airline is able to save money by using Reykjavik as a central hub, using smaller aircraft that require less fuel. However, going via Iceland, with a 75 minute stopover, will add on average about three hours onto a flight from London to Boston, and about five and a half back.

Mogensen claims that WOW has managed to achieve such efficiency so far with its Boston and Washington routes, with load factors of 95 per cent or higher (the load factor is a measure of a flight’s efficiency and ability to generate revenue; the industry wide figure for 2014 was 80 per cent).

He says the transatlantic market is approximately 60 million passengers a year his goal is for WOW to have a 10 per cent share of that by 2020.

WOW is going to achieve this, he says, by targeting what he describes as smaller b2b routes business city to business city.

The airline allows each passenger a free piece of hand luggage, however, only up to 5kg, with customers able to purchase additional weight, up to 12kg and at a hefty 28. Check in luggage costs from 39 per piece. As expected from a low cost airline, but not, perhaps, a long haul flight, onboard food and drink costs.

Mogensen says he has always wanted WOW to offer “the lowest airfares with a smile”, adding “I never understand why so many airlines fail on basic customer service”.

He says he’s enabling more people to travel by offering cheaper transatlantic flights. He says he’s stimulating the market. But will he succeed where others have failed before? He’s confident he will, but only time will tell.

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