Iceland Mag

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Iceland Mag

Business

Expansion of WOW air in US causing jitters among American airlines

By Staff

  • Skúli Mogensen The founder and CEO of WOW air has reason to be pleased. Photo/Vilhelm

The shares of American airlines Delta, American Airlines and United Airlines fell following the announcement by WOW air that the Icelandic budget airline would add four new destinations in North America. 

Read more: WOW air adds four new destinations in the US

WOW air announced last week that it was adding four new destinations in the Mid West: Detroit, St. Louis, Cleveland and Cincinnati. The airline will fly four times weekly to each of the destinations, using its new Airbus A321 planes. The addition of the four new destinations brings the number of WOW air destinations in the US to twelve. 

US business media reports that the shares of major US airlines took a hit following the announcement. Delta fell by 2.06%, American Airlines by 3.17% and United by 2.89%. The US investment site The Motley Fool explains that the transatlantic market has traditionally been a key profit center for the large US carriers. United, American and Delta have dominated the market. 

Read more: Icelandair and WOW among fastest growing airlines flying between Europe and US

The Motley Fool points out that budget carriers like WOW air have been puncturing the oligopoly of the big legacy carriers, and that this development has only begun. Airlines like WOW air and Norwegian air will be able to chip even more at the big three by offering cheaper airfares. At the same time the growth of WOW air is expected to bring more visitors to Iceland, as the airline routes all of its trans-Atlantic flights through its hub in Keflavík.

The new routes from the US to Iceland by WOW air and its recent announcement it would be adding destinations in Asia suggest the airline will continue to grow in the foreseeable future.

 

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