Skúli Mogensen, CEO and founder, says being a young, and still relatively small airline means WOW air can be ambitious about the airports it would like to serve, while it also has the flexibility to launch in new markets at short notice. “We are always looking at the opportunities. At the moment our focus is on transatlantic operations, but anything is possible!”
An interview with Skúli Mogensen, CEO and founder, WOW air. By Jonathan Ford
Iceland’s WOW air has grown rapidly since its inaugural service to Paris in 2012, carrying its one-millionth passenger by December 2014 and this year welcoming 840,000 travellers. It now connects Reykjavik with 20 destinations across the US and Europe and, with the launch of several new transatlantic services next year, it expects its traffic to more than double to 1.8 million in 2016.
Airport Business met with Skúli Mogensen, WOW air’s CEO and founder, the day after the airline announced it is to incorporate three A330s into its fleet, enabling it to develop new links with Los Angeles and San Francisco.
Before founding WOW air, of which he is the sole shareholder, Mogensen (47), a serial entrepreneur, spent 20 years in the technology, media and telecoms sectors, making his fortune in mobile phone software. After co-founding OZ Communications while still studying philosophy at the University of Iceland, OZ went on to sell over 100 million copies of its messaging software to all the major handset manufacturers and mobile operators, before Nokia bought it in 2008, giving Mogensen the capital to start-up WOW air.
WOW air launched services to Baltimore/Washington in May. Cutting the ribbon are: Skúli Mogensen, CEO and founder, WOW air; Ragnheidur Elin Arnadottir, Minister of Industry and Commerce; and Bjorn Oli Hauksson, Managing Director, Isavia.
Keflavik’s “transatlantic hub”
The ultra-low-cost carrier will begin flying to the US West Coast in summer 2016. Los Angeles and San Francisco will be its fifth and sixth destinations in North America, following the launch of transatlantic services from London Gatwick to Boston and Washington DC (via Reykjavik) earlier this year, and the announcement that WOW air will begin flying to Montréal and Toronto in May 2016. “This is a game-changer for WOW air as we cement ourselves as the industry leader in the ultra-low-cost, long-haul category,” says Mogensen. “This move is strategically-important and now is exactly the right time to do it. Iceland is perfectly-located to act as a transatlantic hub between Europe and the US, which is evidenced by our current services to Boston and Baltimore/Washington performing so well. Prices connecting to the US West Coast have been high, so now is the ideal chance to take action on this great opportunity.”
WOW air has certainly hit on an effective business model with the Euro-North America Keflavik hub showing every sign of working with load factors of +90%, and demand continuing to rise. O&D traffic, meanwhile, accounts for only about 20% of the airline’s overall traffic. “We have a great relationship with the airport. The main issue with Keflavik is that it’s already close to being full,” explains Mogensen. “We are aware that the airport is developing extra capacity, but this is not due to be online until 2020 or 2021, so it’s going to be a challenge in the near future to continue growing at our current rate in Iceland.”
With that in mind, WOW air is exploring the possibility of starting new operations and bases outside of Iceland. “We are always looking at opportunities to add to our network. We are not married to Iceland – that’s why we are called WOW air and not WOW Iceland.”
Skúli Mogensen, CEO and founder, WOW air (right) told Airport Business’ Jonathan Ford that its US West Coast services launching in summer 2016 are “a game-changer for WOW air as we cement ourselves as the industry leader in the ultra-low-cost, long-haul category.”
“Secondary airports becoming primary hubs”
The addition of widebodies had been on the WOW air radar for well over a year. It had already incorporated the A321 last year, allowing it to test the transatlantic market on the routes to Boston and Baltimore/Washington with a capable single aisle aircraft, before transitioning to the three A330s.
When identifying airports he would like to serve with this expanded fleet, Mogensen comments that WOW air does not need to try and serve primary airports: “Over the past decade secondary airports have themselves become primary hubs – take London Gatwick for example – the low-cost market has grown Gatwick from being a secondary airport to a primary airport and shows that primary airports can embrace the low-cost carrier model.”
Mogensen says being a young, and still relatively small airline means WOW air can be ambitious about the airports it would like to serve, while it also has the flexibility to launch in new markets at short notice. “We are always looking at the opportunities. At the moment our focus is on transatlantic operations, but anything is possible!”
