WOW Air CEO reveals the key mistake his airline and low-cost rivals such as Norwegian have made

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WOW Air CEO reveals the key mistake his airline and low-cost rivals such as Norwegian have made

Wow Air CEO

WOW Air

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  • Low-cost, long-haul carriers like WOW Air and Norwegian Air have made trans-Atlantic flying much more affordable in recent years.
  • However, with the financial instability faced by both carriers, there are questions as to whether the business model can be viable in the long-run.
  • According to WOW Air's CEO, low-cost, long-haul airlines, including his own and rival Norwegian, have made the mistake of introducing a premium cabin and operating multiple types of aircraft.
  • This complicates service delivery and increases the cost operation.

The return of low-cost long-haul airlines has transformed the trans-Atlantic flying for millions of people. Low-cost carriers such as Norwegian and WOW have helped lower fares for traditionally price flights between the US and Europe.

But with the sudden collapse of Primera Air along with the financial troubles faced by WOW Air and Norwegian in 2018, some have questioned the long-term viability of low-cost long haul industry.

In a recent interview with Business Insider, WOW Air founder, and CEO Skuli Mogensen said the key mistake his airline made is abandoning the single cabin and single aircraft type strategy.

"One of the core essences of the successful low-cost model is to ensure that you maintain a simple and coherent fleet structure because it will very quickly complicate the operations and therefore the costs if you have multiple fleet types," Mogensen said.

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Airbus A321neo  WOW air

Airbus

A WOW Air Airbus A321neo.

The added cost and complexities of adding Airbus A330 wide-body jets to its fleet, along with the addition of a premium cabin did tremendous damage to the WOW's financials, Mogensen told us.

Read more: Wow Air CEO reveals what went wrong with his airline after a tumultuous year when the company had to lay off 111 workers and dump half of its planes.

And WOW Air isn't the only one to make this mistake.

"I think that one of the challenges the low-cost long-haul model is facing is that many of the so-called low-cost carriers aren't really following the low-cost theme," Mogensen said.

In particular, his rivals at Norwegian Air.

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"I would argue that Norwegian is not a so much low cost any more," he told us.

According to Mogensen, Norwegian's decision to operate multiple aircraft types, a business class cabin, Wifi, and built-in in-flight entertainment systems make the airline more of a full-service legacy carrier than a low-cost operator.

Norwegian Boeing 787 9

Norwegian

A Norwegian Air Boeing 787 Dreamliner.

Norwegian operates Airbus A320-family and Boeing 737 narrowbody jets along with premium-cabin equipped Boeing 787 Dreamliner wide-body airlines.

It should be noted that WOW Air is considered an ultra-low-cost carrier while Norwegian is a less-restrictive low-cost carrier with more amenities.

Read more: Airbus CEO reveals why he's not worried about a recession hurting the company's business.

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In a statement to Business Insider, Anders Lindstrom, Norwegian Air's director of communications in North America said:

"Norwegian Air believes that you can be a low-cost airline and offer a premium experience that rivals any legacy carrier. The term "low cost" refers to operating costs, and within that reference, Norwegian is very much a low-cost airline. But low operating costs do not necessarily equate to a subpar onboard experience. We are committed to providing our customers with a comfortable, enjoyable and highly affordable experience, with personal screens, sufficient legroom, and soon also, free WiFi on long-haul routes, to name just a few highlights in Economy. With Premium, we moved beyond just offering extra legroom that ultralow cost airlines do, and create a niche product that is cheaper than what any competitor offer, yet features proper recliner seats, full meal services and with most Premium tickets, also lounge access.

"In short, we don't believe a cheap fare should equate a cheap product, and that is why we have been named the world's best low-cost long-haul airline for the past four consecutive years."

As for WOW Air, it's phasing out its wide-body fleet. In 2019, the Icelandic carrier will return to flying only Airbus A320-family jets.

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