How WOW Air Disrupted The Airline Industry

by Amanda Elliott

How WOW Air Disrupted The Airline IndustryA remote, often misunderstood country, Iceland  has become one of the hottest tourist destinations. So, how did one airline company disrupt the airline industry through a low-budget carrier?

The Rise of Icelandic Travel in the United States:

Iceland is anticipated to have more tourists than their entire population this year according to Vox.  This is quite alarming since a mere six years ago Iceland’s tourism population was declining.

The country used headlines from a volcanic eruption that led to a week of European flight cancellations in 2010 to actually draw positive attention to Iceland.

Through a social media campaign, Iceland got on the map and tourists flocked there. Seeing an increased demand, the airline, WOW Air, saw an opportunity to capitalize on this tourism travel disruption.

How Does WOW Air Offer Low Prices:

WOW became the budget airline to Iceland, offering flights at a reasonable price from Europe as early as 2012. In 2015, the budget airline expanded to the United States and now offers promotional prices below $500 with baggage, almost 75 percent off the original cost of travel in 2010 – $1500.

Wanting to be  a low-cost carrier, WOW Air offers low prices to Iceland and Europe, where airfare has actually increased.

The low pricing is a reflection of the details and the vision for the company.

CEO of WOW Air, Skuli Mogensen went into the details of being a low-cost carrier,”We have very little overhead. We never compromise on safety or security. Travelers book directly through the Internet, there’s no intermediary. We leverage technology in every aspect. We have a new fleet that’s more cost-efficient and burns less fuel. We maximize loads. When you take all of this into account, it adds up pretty quickly. My background is technology and telecom. I find it interesting that we can have a small team in Iceland and still challenge the big legacy airlines.”

On top of the airline industry struggling to keep consumers through mergers, data center outages, TSA complaints and now a-la-carte baggage pricing, the tourism industry has vastly changed.

But there’s also  another big factor in this shift – safety.

“As leisure travelers are looking at travel plans, they are absolutely changing where they want to go based on their perception of what they consider safe and unsafe,” says Liz Miller, author of  “How Global Voices Shape Travel Choices: The Impact of Consumer Apprehension on Travel Intention.”

Travel Shifts: Price and Safety Trump Convenience:

It’s hard to imagine a destination as coveted as Europe is now seeing competition all over including Asia, Australia, South America and even Iceland in the wake of terrorism and high-profile crime like the jewelry theft at Paris Fashion Week.

Disruptors come in all different forms. In this case, bad news for tourism – a week long of flight cancellations and delays – actually helped boom the airline industry by shifting travel to other regions like Iceland.

Iceland’s tourism campaign not only shifted the airline industry, but it was also a major shift for the country, whose GDP comprised mainly of the aluminum and fishing industries less than a decade ago.

Does your company have a plan for disruptors in its industry? Find out how PreScouter helps corporations innovate and stay on top of trends to prepare for major disruptors like this one in the airline industry.

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Amanda Elliott is the Marketing Coordinator and Journal Editor at PreScouter. She is experienced in creating content and marketing campaigns. In her free time, Amanda interviews other Chicago startups in her blog, Windy City Cosmo.

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