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Airlines will soon pay you to fly, says the CEO of an Icelandic Airlines

by Hemal V

Can you imagine a scenario where airlines pay the passengers to take their flight? Or at least offer you a flight journey free of cost? Well, here is a CEO of a 3-year-old Icelandic airline company who believes that such a thing is possible. Skuli Mogensen, the CEO of WOW Air, an Icelandic airlines company, said in a recent interview that he envisions a day when airlines would start paying its passengers to fly.

WOW air offers cheapest international flight tickets

WOW Air began its operations in 2014 and has been quite popular for its inexpensive ticket fares. Earlier this year, the company ran a sale campaign for a one-way trip from the US to Europe flying for fares as low as at $69. In June 2017, WOW Air ran another campaign of selling trans-Atlantic tickets as low as $55. Both the campaigns have been so successful that the company is planning to double its size in a couple of years.

Image Credits- Wow Air Image Credits- WOW Air

The secret behind WOW Air’s low fares

While these low fares and never-seen deals are attractive, it also raises a curious question of how the company is managing its revenue. In a recent interview, CEO Mogensen said that if a company is able to capitalise their ancillary revenue to the fullest extent, then they do not have to worry about the passenger revenue. All airlines have ancillary sources of income such as charges for seat selection, in-flight food, early boarding, in-flight product sale, etc.

In addition to these, airlines also partner with various hotels, rental car agencies, restaurants, tourism agencies, and other travel support companies. This is how airlines ensure that their customers get a one-stop solution for all their travel needs. It also provides an additional source of income for the airline. According to the WOW Air CEO, when an airline is making more ancillary revenue than the passenger revenue, then they can offer tickets for free.

Image Credits- Wow Air Image Credits- WOW Air

WOW Air offers a number of a-la-carte services for its passengers. According to Mogensen, airlines should provide a deeper and a personalised customer relationship by understanding their needs and behavior.  While at the same time, they should ensure that they do not affect their customer’s privacy.  Mogensen also added that by understanding needs of the customer needs better, airlines could facilitate an effective interaction with them. This will, in turn, ensure that the customers have a more successful trip.  With the help of social media and analytics, CEO Mogensen believes that WOW Air will be able to offer customer-centric services and increase its ancillary revenue.

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