CEO: WOW Air shrinks to 4 US cities as it 'gets back to basics'

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WOW Air will shrink its number of U.S. destinations to just four this summer as it seeks to return to stable financial footing.

By summer, WOW’s only gateways in the United States will be Baltimore/Washington (BWI), Boston, Detroit and New Jersey’s Newark Liberty airport. It marks a retrenchment for the Icelandic budget carrier, which flew to more than a dozen U.S. cities as recently just mid-2018.

“We are getting back to our roots, getting back to the basics,” WOW Air founder and CEO Skúli Mogensen said Monday in a phone interview with USA TODAY’s Today in the Sky blog, speaking on the same day that the carrier rolled out a sale offering $49 one-way fares to Europe.

WOW launched in 2012 and expanded to the USA in 2015. It grew rapidly here, making headlines with sales that regularly dropped fares to Europe to less than $100 one way.

In 2018, however, WOW ran into financial headwinds that raised questions about its survival. A cash crunch created pressure for the airline and a subsequent acquisition by rival Icelandair seemed like a lifeline until the deal fell through.

In November, Indigo Partners – the parent company of Frontier Airlines and several other successful “ultra low-cost carriers” (ULCCs) – stepped with plans to invest in the carrier and help it remake its operation. 

“That’s still very much ongoing,” Mogensen said about talks between WOW and Indigo. “I can’t really say much … other than that we are still working according to plan.”

In the meantime, however, WOW has had to make adjustments amid the financial turbulence.  The company had to return or sell several of its aircraft to free up cash, slashing its fleet from 20 planes last year to just 11 now. 

With the fleet reduction, WOW has had to ax numerous U.S. cities from its route map, dropping service to Chicago O’Hare, Cincinnati, Cleveland, Dallas/Fort Worth, Los Angeles, New York JFK, Pittsburgh and San Francisco.

WOW also flies to Montreal and Toronto in Canada, but has scrapped plans to begin flying from Vancouver.

Mogensen said some markets didn’t live up to expectations, but conceded some were “a direct function of reducing the fleet to 11 aircraft and, hence, rationalizing the network to fit that size.”

“I think we grew extremely rapidly, but … we made some strategic mistakes in adding the (Airbus) A330 into our fleet,” Mogensen said, referencing the widebody jets WOW added to its fleet to serve long-haul routes to U.S. destinations in California and Texas.

The company has since removed the A330s from its fleet, which Mogensen said would allow WOW to “simplify our operation significantly.”

“We are getting back to our roots, getting back to the basics,” he added. “Getting back to building a stronger foundation that will then allow us to grow again as a purebred low-cost airline.”

While Mogensen said he could not discuss specifics of WOW’s ongoing talks with Indigo, he did acknowledge that his company’s efforts to “go back to the basics” fit a strategy that Indigo has employed with great success at airlines in the United States and elsewhere.

“It’s very much aligned with Indigo’s vision, when you look at how the airlines they get involved with operate,” Mogensen said. “So I think there is no surprise in saying that the pure low-cost operating model is something that they are strong believers in.”

“That is the vision for WOW Air that I had initially. Unfortunately, we got a little bit lost in the excitement of growing in the last year or so. We are not reinventing the wheel here. We are simply getting back to our original vision.”

If that back-to-the basics effort is a success, Mogensen said WOW’s growth will resume.

“We expect to start growing again as of 2020,” he said.

Stay tuned…

This article originally appeared on USA TODAY: CEO: WOW Air shrinks to 4 US cities as it ‘gets back to basics’

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