United Airlines — to say nothing of other major United States-based legacy carriers American Airlines and Delta Air Lines — no doubt were NOT among those feeling the cheer this morning when WOW air, the upstart Iceland-based ultra-low-fare international carrier, announced its holiday gift to travelers in Chicago and several other U.S. markets.
WOW said it is introducing $99.99 one-way fares to its hometown Reykjavik, Iceland, as well as London, Amsterdam, and Dublin, not only from Chicago, but also Pittsburgh and Boston.
The super low-ball fare is available on select flights from December through May, an unusually wide window in which to make such low fares available. Off-season WOW flies four times weekly from Chicago's O'Hare International Airport to Reykjavik.
The WOW one-way fare rose only slightly to $129.99 for departures to the same four European cities from Los Angeles, San Francisco and Miami, Florida, but the window of availability is narrower from December only through March.
Renegade WOW Air founder and CEO Skuli Mogensen said of what he dubbed the carrier's "Purple Friday Sale" (purple is WOW's signature livery color): "WOW air is happy to provide some early holiday cheer to travelers in many of our U.S. destinations. We hope to make international travel more accessible for travel enthusiasts during the holiday season and beyond."
United Airlines had no immediate formal response to WOW's low-ball fare sale, but privately sources at the Chicago-based carrier doubted United would move to match the new WOW fares on the sale routes.
Still, WOW is, in essence, now doing internationally what United (NYSE: UAL), American (NASDAQ: AAL) and Delta (NYSE: DAL) are doing on their domestic routes, offering a barebones basic economy fare that includes just the airfare and one personal carry-on. Everything else is extra.
There were rumors that one or more U.S.-based carriers might try introducing a version of basic economy on international flights. WOW's move might hasten a decision on whether to try it.
But if adopted by U.S.-based legacy carriers, low-ball fares like WOW's could wreak havoc on their bottom lines, as the long-haul flights and the higher fares they command have traditionally been a significant revenue generator for the likes of United, Delta and American.
However United and its U.S.-based competitors opt to combat WOW and similar competitors, there's no denying ultra-low-fare international carriers are suddenly becoming more commonplace. In 2016, WOW said it flew a total 1.7 million passengers, a 130 percent increase over 2015. WOW now serves 39 destinations in the United States and Europe using Airbus-320, 321 and 330 model aircraft.
WOW and Norwegian Air have rapidly expanded their gateways in the U.S., and earlier this month, World Airways announced earlier this month it is planning to be reborn as early as next year as an ultra-low-fare carrier serving Latin American and Asian markets from hubs in Miami and Los Angeles using brand new Boeing 787 Dreamliners.
Dealing with these low-ball threats is but one more challenge facing United CEO Oscar Munoz who is under pressure from the investor community to quickly boost bottom line results or face a possible upheaval in the carrier's executive suite.
United Airlines is a unit of United Continental Holdings.
