The Icelandic low-cost carrier based at Keflavik International Airport in Reykjavik first launched its operations in 2012. Since then, the company has seen incredible growth and has spurred the attention of rivals and customers across the aviation market. There are a number of factors influencing the rapid growth of the carrier and forecasts are that WOW Air will continue building dominance in the market and potentially surpass Icelandair, Iceland’s largest operator.
WOW Air’s Growth Factors
WOW Air’s main benefit is the fact that the carrier is operating in the quickest developing trans-Atlantic markets to the US, with forecasts showing that passenger traffic is to yet grow even further. Geographically speaking, Iceland’s position is ideal for airlines to take advantage of the tremendous air travel through the region, due to its closeness to North America and Europe. Furthermore, Iceland alone is a beautiful enough destination to attract a vast number of tourists every year.
OAG information shows that during 2018 the annual seat capacity to and from Iceland is to reach 12.1 million, growing by 13 percent. For WOW Air, the capacity for the full year is to increase by 28 percent and reach a total of 3.8 million seats. In terms of seat share, for the first time in history Icelandair will fall below 50 percent as WOW Air is gaining speed, with a projection of 31.3 percent seat share of the total number of seats to and from Iceland in 2018.
WOW Air routes and markets
WOW Air already actively competes with Icelandair for market share in Europe and North America. Asia is expected to become the next focus region, with the carrier putting emphasis on its growth in the region. Earlier in 2018 the Chief Executive Officer of WOW Air Skuli Mogensen, shared that plans are to launch up to 15 Asian destinations with the ultimate goal being to turn Iceland into a “Dubai in the North”. Now the first flight between Iceland and New Delhi is scheduled for December 6, 2018.
Despite the significant expansion rates that WOW Air has demonstrated and keeps achieving, there are worries regarding the continuation of its growth, mainly due to capacity constraints and available aircraft to achieve goals. The fleet of WOW Air currently consists of only Airbus aircraft, including the A320, A321 and the A330. In order to satisfy the demand for the Asian market, the carrier would need to restructure its aircraft operations and focus more on the A330s, which provide increased capacity. In addition, Keflavik Airport is merely fully used in terms of capacity, and if the carrier may need to consider expanding into other hubs in order to answer demand, constraints are already beginning to limit the carrier in its operations.