WOW Air failure doesn't surprise airline experts

Aviation experts were not surprised by Thursday’s abrupt news that WOW Air has ceased operations.

WOW had operated budget flights out of Pittsburgh International Airport to Iceland and marketed itself as a cheap way to get to Europe.

“The model they have just doesn’t have enough traffic,” said Mike Boyd, president of Evergreen, Colo.-based aviation consulting firm Boyd Group International. “There just aren’t enough people to make it work.”

“It was expected,” added Bijan Vasigh, a professor at Embry-Riddle Aeronautical University in Daytona Beach, Fla.

The economic model that budget airlines such as WOW operate under makes it tough to survive, Vasigh said.

Tempers were high last night at #yyz #wowair. I can’t post anymore of this due to the swearing!
The flight staff had just informed us they were in the same position as us. pic.twitter.com/tJjcNbVBku

— travelgirlto (@travelgirlto) March 28, 2019

This is the email Wow Air passengers received after the airline shut down and their flights were canceled: https://t.co/GUc34XZ13C pic.twitter.com/V93FbIQY2p

— CNN International (@cnni) March 28, 2019

WOW Air was founded by Icelandic entrepreneur Skuli Mogensen in 2011, and the following year it began offering budget flights between North America and Europe through its hub in Reykjavik.

It began offering flights at Pittsburgh International Airport in June 2017 and expanded service to Reykjavik in May 2018, flying to and from Iceland five days a week. The flights were ultra-cheap — for as low as $99, travelers could book tickets to Iceland from Pittsburgh. Connecting flights to London, Frankfurt, Berlin, Paris and Dublin were available for about $150.

The airline’s model catered to “impulse” travelers, and it failed because there just aren’t enough people who wanted to make a spur-of-the-moment trip across the Atlantic, Boyd said.

“If it’s an impulse trip to Orlando, not a problem. If it’s an impulse trip to Oslo, with a connection to an airport you can’t even spell, that cuts down the market size pretty rapidly,” Boyd said.

WOW stopped flights from Pittsburgh to Reyjkavik on Jan. 11. The Allegheny County Airport Authority claims the airline broke an $800,000 incentive deal that required two years of service and is seeking $565,472 plus landing and gate fees.

The authority hasn’t received any cash from WOW Air as of Thursday, spokesman Bob Kerlik said.

“This has everything to do with WOW and nothing to do with Pittsburgh,” Boyd said. “It’s no reflection on the Pittsburgh or Western Pennsylvania marketplace.”

It also doesn’t mean the airport authority should stop offering lucrative incentives to attract new carriers and flights at the airport, he said.

“If it’s something to showcase the airport, you do it,” Boyd said.

Offering incentives is key to attracting carriers and flights “because they demonstrate the airport’s commitment to the airline for its multimillion dollar investment of nonstop flights,” Kerlik said in an email to the Tribune-Review.

“But airlines don’t show up just because you give them an incentive. It’s because you demonstrate how your market fits into their network,” Kerlik said.

A new route that British Airways is offering from Pittsburgh to London, which starts Tuesday, will be “wildly successful” and will allow people to travel to London and then on to other European cities, Boyd said.

“They’ll be feeding people to Paris, to Brussels, to Copenhagen, to India,” he said. “Pittsburgh is a very strong commercial market and accesses a wide area for commercial service.”

Delta’s flight from Pittsburgh to Paris ended last year, but the move wasn’t as much about lack of customers as it was lack of planes to make the trip, Boyd said.

“Paris is a much weaker market than London, and it did OK,” he said.

The London flights will be 85 percent full consistently, he predicted.

Moving forward, Pittsburgh could seek out service from the German-based Lufthansa and airlines serving Latin America, Boyd said.

Although it lost WOW, “the bad time has passed for Pittsburgh,” Vasigh said, referencing US Airways dropping its hub in Pittsburgh in 2004.

Airport officials have “worked diligently” to attract new flights and carriers in recent years and the airport has a lot of unused potential, Vasigh said.

“We’re on a positive growth trajectory,” Kerlik said. “We finished 2018 with the highest passenger count in a decade with nearly 10 million passengers and 34 straight months of positive passenger growth.”