For Indians flying Western countries, there’s a new airline – and it is offering the cheapest fares available. Iceland’s trans-Atlantic carrier WOW Air Ehf, which offers low-cost flights via its hub in Reykjavik, is entering India with tickets to the US at $199 starting 7 December.
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This translates to a one-way fare of Rs13,499 between Delhi and any of 15 North American cities including New York, Los Angeles, Boston, Chicago, and Toronto, as well as London, that are part of WOW’s current network. There will be a stopover in Reykjavik, capital of Iceland. This would be the first no-frills option for passengers traveling between India and North America’s eastern seaboard.
WOW Air’s tickets on Airbus SE A330neo aircraft will be priced at half of what full-service carriers like Emirates Airline offer, chief executive officer Skuli Mogensen said in media interviews in New Delhi on Tuesday. The fares aren’t just introductory, he said.
“If you look at flights from India to North America, they actually go directly above Iceland,” Mogensen said. “So Iceland is the perfect hub for India-to-North America traffic. It has a superior connecting time than what people currently use — London, Dubai, Frankfurt or Amsterdam.”
Serial entrepreneur Mogensen founded Wow Air in 2012, four years after selling his last venture — Oz Communications in the mobile software space — to Nokia. Mogensen says that he was almost in retirement mode when he decided to start an airline in his native country. In a span of six years, WOW air has reached a scale where it's almost neck-and-neck with legacy carrier Icelandair, an airline started in 1937. "We will overtake them by next year in market share," he said.
After disrupting the aviation market in Iceland, Mogensen is bringing his low-cost carrier to India - New Delhi to begin with.
Wow Air is elbowing its way into a market long dominated by Middle Eastern carriers like Emirates and Etihad Airways PJSC, which have used their nearby hubs in Dubai and Abu Dhabi to lure Indians flying west. Wow Air could also get an early-mover advantage in the world’s fastest growing major aviation market, where local budget carriers like IndiGo, operated by InterGlobe Aviation Ltd, and SpiceJet Ltd. are firming up plans to start low-cost long haul operations.
The services will start in December this year subject to getting slots at the Delhi airport. WOW is already negotiating with GMR to get five slots per week, preferably departure slots at around 6am, for its wide-body Airbus A330neos. "We are going ahead with the sales with the assumption that we will get the slots that we have requested," Morgensen said.
About 20,000 people fly between India and North America every day. "We will be the first long-haul low-cost airline to fly into India. It's a huge market with a huge potential. I think India is underserved when you look at flights between India and North America. We are exploring possibilities to open stations in more Indian cities. Our target customers are smart travellers - people who are value conscious," said Mogensen.
WOW would offer four products; the basic product doesn't include check-in baggage and meals.
It flies to 35 European and North American destinations, and it would be competing with aggressive Middle-eastern hubs like Dubai and Abu Dhabi which are catering for a large international traffic originating from India. "We will offer a shorter total trip time than if you go to Dubai. Shorter flight time means less engine usage, less costs that translates into less ticket price. In our case, it takes 18 hours to reach East Coast (in the US) from India, including a two-hour layover in Iceland," he says.Emirates, United
Middle-eastern carriers typically offer among the cheapest fares from India to the US. For a flight to New York from New Delhi on 15 June, Turkish Airlines was offering the cheapest fare at $420 with a stop in Istanbul, while Emirates was for $510. Air India had the cheapest non-stop flight at $660. United Airlines sold tickets at $940, according to online travel agent MakeMyTrip.com.
India will overtake UK to become the third-largest aviation market with 278 million passengers by 2025, according to International Air Transport Association. The market will contribute $172 billion to the nation’s economy, more than doubling from the current $72 billion, according to IATA.
With crude oil prices rising, Mogensen says that he's not worried unless the prices go beyond $100 a barrel. "Oil is last century's commodity. We will be operating A330neos which are 15 per cent more fuel efficient. The other reason we can offer low fares is that we offer more services beyond selling seats. When someone comes to Iceland, we can offer best prices on hotels, car rentals, and restaurants. We will extract revenues from other sources," he adds.