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Airline Stocks Sink as WOW Air Expands into the Midwest
WOW Air, an Iceland-based low-cost airline, announced on Wednesday that it will expand into four Midwest cities, causing major airline stocks to tumble.
The Icelandic company known for its cheap tickets to Europe is adding service to St. Louis, Cleveland, Cincinnati, and Detroit. This will bring the company to a total of 12 U.S. destinations.
One-way tickets to Iceland will start at $99.99 from all four cities. Connecting flights to WOW’s other European locations will begin at $149.99.
When asked if there was enough demand in the Midwest for the new non-stop flights to Iceland, WOW Air founder and CEO Skuli Mogensen said yes. “With those kind of prices, we have seen in other markets that we enter that we have stimulated the market significantly.”
“Our unique opportunity is to use Iceland as a hub. We can then distribute to our main destinations in Europe, be it London, Paris, Amsterdam, Frankfurt, Berlin, Copenhagen, etc.,” Mogensen said. “That’s really the key. Instead of having a single point-to-point flight, we actually give you a very affordable flight to multiple destinations.”
In reaction to this news, major airline stocks fell. Delta Air Lines (DAL - Free Report) stock closed 2.06% lower at $46.18. American Airlines Group (AAL - Free Report) stock tumbled 3.17% to $43.97. Meanwhile, shares of United Continental (UAL - Free Report) tumbled 2.89% to $62.83, and Southwest Airlines (LUV - Free Report) stock went down 3.22% to $51.72.
WOW’s new routes will launch in the spring, with tickets going on sale Wednesday.
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