TORONTO — It’s war. Following WOW air’s announcement last week that it will be offering $99 fares to Europe from Canada starting in spring 2016, many in the travel industry speculated the start of a price war and they weren’t entirely off the mark. Yesterday, Norwegian Air Shuttle ASA put up its own battle cry when Chief Executive Officer Bjørn Kjos hinted at selling one-way tickets from the U.S. to Europe for US$69 as early as 2017.
Europe’s third-largest budget airline hopes to begin service to Edinburg and Bergen, Norway from U.S. airports that currently have little or no international service. According to Kjos, these include New York’s Westchester County Airport and Connecticut’s Bradley International Airport, located just north of Hartford.
He also noted that average prices on such routes are likely to be closer to $300 roundtrip, compared with many of Norwegian’s fare that run over $500 due to higher fees levied by busier airports.
This would greatly impact larger airlines, such as Deutsche Lufthansa AG, which offer hundreds of destinations via connections in airport hubs. What Norwegian aims to do is make nonstop service to smaller cities, which keeps costs low.
“I think you will see a lot to that effect within five years’ time,” Kjos said in an interview. “What will happen to (Lufthansa) when everyone starts to fly direct?”
Of course, this so-called price war will also have a huge impact on travel agents, who are already experiencing tight competition from OTA’s.
In an exclusive interview with Travelweek, WOW air’s founder, CEO and sole owner Skuli Mogensen did not specify any plans to work directly with Canadian travel agents in the near future, and instead focused on the benefits of online booking.
“At this time, the WOW air strategy is to always offer the lowest price on our website. We have seen that wherever we enter the market, we have offered prices that are up to 30 and 40% lower than what has previously been available. Of course, by doing this we have enabled more people to travel, and more people to fly more often,” he said.
To read Mogensen’s full interview, check out the Airlines & Consolidators Spotlight in the Oct. 8 edition of Travelweek.
