Oh Snap, Icelandair Adds Cleveland

August 28, 2017

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Icelandic Expansion
Icelandair Adds Cleveland
Landing Thoughts:

Icelandair is the flag carrier of the island nation of Iceland. The airline has long been a hybrid of a legacy carrier offering reasonable fares across the Atlantic. They offer a sub-par business class product (deep recline seats) called Saga Class. They also offer a sort of premium economy, and the traditional economy. The airline operates a mix of 757s and 767s, with a few 787s on order. They have long been the connectors of Iceland to the world. They offer flights to a plethora of US detonations, and have codeshares with major airlines (such as Alaska).

Icelandic Expansion

Recently, WOW Air has entered the panorama. The airline has been much more aggressive at expanding than Icelandair. They are an ULCC, and offer low fares for everything. That being said, they also charge for everything, including a carry-on bag. They fly a mix of Airbus aircraft. In order to compete with Icelandair, WOW will bring a sort of business class on their A330s, trying to lure premium passengers from Icelandair.

Both Icelandair and WOW have been expanding very rapidly. WOW Air last week announced flights to four Midwest destinations. They also began flights to Chicago O’Hare and Pittsburgh. Icelandair has been more cautious at such aggressive expansion. They have started around 5 new North America destinations in the last 3 years. In the same time, WOW has added almost all of their US routes, now totaling 13. This doesn’t mean that Icelandair doesn’t have ambitious plans as well.

Icelandair Adds Cleveland

Their most recent expansion destination is Cleveland. The city has been struggling to maintain international connections as United winds down their operations there. The airline will fly one of their 757 to Cleveland. The airline’s plan is to connect passengers loyal to traditional frequent flyer programs, and those not looking to pay for basic extras, from Cleveland to Europe. There is however, one thorn in the plan.

WOW Air’s expansion to the Midwest includes Cleveland. Not only that, they will also fly to Cincinnati, which will also have a small effect on the route out of Cleveland. There will be a showdown of carriers in Ohio. I think, however, the biggest loser here will be United. United depends on feeding Cleveland citizens into their major hubs to connect to Europe. With two low cost carriers attacking them on their home turf, the airline will have a harder time persuading people to take their usually more expensive flights. Both WOW Air and Icelandair offer lower fares than US legacy carriers.

Landing Thoughts:

I am a fan of expansion, and it surprises me how close to each other the announcement of Icelandair and WOW Air flights to Cleveland. There is probably a very fierce rivalry between the two carriers, especially sharing a home base, and a similar business model. The rise of ULCCs has changed the TATL market, and Iceland’s location offers an advantageous location for carriers. These two factors have worked in favor of Icelandic carriers. Icelandair will continue to benefit from these factors, and hopefully expand even more.