CEO airline company predicts one day travellers will be paid to fly

8 years ago - Published in Finance, Fundamental Analysis

There could be a day when an airline will pay you to fly with them, according to the CEO of WOW Air. Skúli Mogensen, founder and CEO of low-cost carrier WOW Air, says he sees a day when customers will be paid by the airline to fly with them.
Wow Air founder and CEO Skuli Mogensen said to media: “I can see a day when we pay you to fly.”  "If you come to us and trust us with your booking, we can see that your airfare is reduced to zero and even reward you for it", he added.

The airline is already known for its extremely low prices for air travel. In January, WOW Air had a sale for $69 one-way tickets from the US to Europe. In June, the carrier featured tickets for as low as $55 for trans-Atlantic flights. The extremely low prices were part of a strategy to bring awareness to the rapidly growing carrier.

Airlines have found ways to lower ticket costs and increase revenue by setting fees for passengers wanting to select certain seats, in-flight meals and early boarding. They have also developed partnerships with hotels, car rental companies, restaurants and other travel-related services to come up with methods to raise revenue in more ways than from ticket sales alone.

That is the strategy Skúli Mogensen hopes to capitalize on. He plans to make ticket prices cheaper, but to have passengers pay for travel options such as more legroom.

“Our goal, and we’re working hard toward it, is for our ancillary revenue to actually surpass our passenger revenue,” Mogensen said. “Whatever airline becomes the first to achieve this will be a game changer,” he added. 

Morgensen also has plans to use social media, so travellers who promote an airline on social media could benefit from a new budget travel policy.

"People tend to take a lot of photos while traveling, sharing their experiences. We see a lot of interesting ways to empower people to spread the word about WOW and to reward them accordingly," Mogensen said.

According to a report in Reuters, budget airlines have historically found it tough to make money on long-haul flights, where longer flying times mean there are fewer options to cut costs, and transatlantic travel has been a tough nut to crack given high competition. That has not stopped many airlines from trying, but they have ended up broke and eventually shuttered.