Iceland's Wow sees growth opportunities after securing AOC

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Icelandic low-cost carrier Wow Air believes it now has the flexibility to expand after securing its air operator’s certificate at the end of last month.

The airline began operations in May last year and later took over the flight operations of Iceland Express. It has been operating using the AOC of Lithuanian carrier Avion Express and Bulgaria’s Air Via.

"The AOC is a turning point in the history of aviation in Iceland," said Wow founder and chief executive Skuli Mogensen as the airline formally launched its new Boston flights at World Travel Market in London.

"It was [the] primary requirement for starting the North American operations. It gives us a lot more control and the opportunity to expand and grow. In a nutshell, it means we are an airline now."

The airline operates three Airbus A320s today and will add two more for spring 2014. "We anticipate to add more in 2015, primarily on the North American side.

"The growth in tourism in Iceland has been amazing. When I looked at the market opportunity, it became apparent there was only one airline in Iceland. We saw an opportunity and the need for a low-cost carrier in Iceland," says Mogensen.

He sees the big opportunity in the growing inbound tourism market in Iceland, which has developed strongly since the banking crisis in Iceland altered the cost of visiting the country. "We still only have some 750,000 tourists a year. London has 15 million," Mogensen says, highlighting the strong demand for activity tourism. "Iceland is in a perfect position, because it is very hard for other markets to compete they can’t just build their own volcanoes and geysers. So we are in a very fortunate position.

"This year we expect to carry around 450,000 passengers. Next year it will be around 720,000. It’s one step at a time."

Mogenson will not be drawn on revenue or profits numbers, but says: "While it’s premature to declare victory, it looks promising. We are hitting our revenue targets and profitability goals sooner than we anticipated."

Further ahead Mogensen sees the opportunity to develop the airline outside of Iceland. "We chose Wow are as a brand because I don’t see ourselves bound to Iceland," he adds. "Iceland is a fundamental initial step. But once we have mastered that, I have always been global. I would hope to see us growing in many directions."