WOW Air: The Low Cost Long Haul Challenge

17 Pages Posted: 8 May 2019

Date Written: March 28, 2019

Abstract

The case describes how WOW air (WOW) evolved from a struggling point-to-point low-cost airline to a hub-and-spoke low-cost long-haul airline (LCLH). In the process the airline rewrote the business model for LCLH and transformed itself from a fringe operator to a fully-fledged airline operating a fleet of leased A321 and A330 aircraft. Airlines around the world are limited by bilateral airline agreements that restrict the routes and route networks they can operate. Although liberalization has been a trend in the industry, the global airline industry has only a handful of low-cost airlines operating long haul routes. The question on everyone's mind was-will it work? WOW Air kept the momentum going until 2018 when signs of financial difficulties started to appear, followed by bankruptcy on 28th of March 2019. As is often the case with low cost airlines the airline was a success story measured in growth but this very success put heavy strains on the financial health and service quality of the airline.

Keywords: low cost airlines, low cost long haul, airlines, success and failure, growth, wow

Suggested Citation

Gudmundsson, Sveinn Vidar, WOW Air: The Low Cost Long Haul Challenge (March 28, 2019). Available at SSRN: https://ssrn.com/abstract=3369059 or http://dx.doi.org/10.2139/ssrn.3369059

Sveinn Vidar Gudmundsson (Contact Author)

Toulouse Business School ( email )

20, bd Lascrosses
Toulouse, 31068
France

HOME PAGE: http://www.tbs-education.fr

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