Wow Air, the roughly three-year old discount air carrier, is going where few other ultra low cost airlines have gone: across the Atlantic. And if all goes according to plan, it's going to do it much cheaper than anyone else.
The budget airline, which is based in Iceland, announced last week that it will begin flying passengers non-stop from both Boston and Baltimore to Reykjavik, Iceland for as little as $99 each way. The airline will also offer one-stop flights from the two U.S. cities to London and Copenhagen, starting at $228 for a round trip. The airline will begin offering the flights next March.
"Paying even $200 for a one-way flight to, say, London, is unheard of, " said Tom Parsons, the CEO of bestfares.com, which tracks airline pricing. "It just doesn't exist."
The incredibly low ticket prices are real, but don't expect them to last forever. "Those are definitely opening, introductory fares, " said Skuli Mogensen, Wow Air's chief executive. "On an occasional basis we hope to be able to introduce similar fares, but those very aggressive. We wouldn't be talking if I had introduced prices more commonly seen in the market, would we?"
But the airline's commitment is to offer the cheapest ticket for every route the airline flies, including transatlantic routes, Mogensen said. The prices Wow Air offers will vary by season, and depend on a number of other factors, including fuel prices and flight vacancies.
Wow Air's cheapest transatlantic offerings, by month, looked something like this on Tuesday afternoon, according to the airlines' website.
By comparison, the average price of a round-trip plane ticket between Boston and Reykjavik in March of 2015 is just under 0, by Parson's estimate. A single stop round-trip ticket between Boston and London runs about $770, while a non-stop ticket costs roughly $800.
How does Wow Air expect to pull this off? For one, by operating like all other ultra discount carries. A ticket on Wow Air will come with little more than a seat, mini-tray table, and 11 pound carry-on. Everything else will cost extra. A carry-on will cost an extra $29 when booked online, or an additional $48 when done so at the airport. Checked luggage will set one back a bit more—an extra $48 online or $67 at check-in. And extra leg room, pre-assigned seats, and, of course, food will rack up the bill, too.
But unlike Spirit Airlines, which is famous for squeezing passengers' knees, Wow Air won't skimp quite as much on leg room. The seat pitch, the distance between two seats, is between 30 and 36 inches on the Airbus A320 aircrafts flown by the airline, said Svanhvít Fridriksdóttir, Wow Air's director of communications. Most pitch sizes are about 31 inches, and many discount carrier pitch sizes are less than 30 inches. Spirit Airlines', for instance, is 28 inches.
Wow Air also expects to save money by operating as efficiently as possible. The company relies heavily on online sales and marketing, for instance, which allows it to skip the cost of middlemen. It also operates few airplanes—only four currently—but maximizes their utility. "We have extremely good aircraft utilization, " said Mogensen. "Within one 24-hour cycle, a single airplane will fly from Iceland to Boston, back to Iceland, and continue to London, and then back to Iceland, each time full of passengers."
Wow Air plans to fly all of these routes in 2015. (Source: Wow Air)
And Wow Air expects to fill all of its planes, a feat few if any airlines operating transatlantic routes have managed. "Our assumption is that we will fill every plane, and we price accordingly, " said Mogensen.
But Wow Air's biggest advantage might be its headquarters. Iceland is ideal, because it gives airplanes a midpoint where they can stop to refuel. That allows the airline to fly passengers to and from Europe in smaller planes, which it can more consistently fill with passengers. It also helps the airline save money on fuel. "About 40 percent of the fuel airplanes carry is used to ferry the fuel to the final destination, " said Bob Mann, an aviation industry analyst at R.W. Mann and Co. Consulting. "As you go shorter and shorter distances, you can ferry less fuel, and save money."
Convincing customers to travel with a stop over might be difficult, but if it means hundreds in savings it's hard to believe it won't be possible.