WOW air

Early developments and expansion (2012–2019)

Iceland's geographic position has made it an attractive stopover point for flights across the Atlantic. In the 1960s, flag carrier Icelandair established a stopover scheme to encourage tourism that continues to this day. Icelandic Airlines, also known as Loftleiðir and remembered by the nicknames "Hippie Airline" and "Hippie Express", also used this approach along with a number of expense-lowering measures to become the first low-cost transatlantic carrier before it merged to form Icelandair. The collapse of the króna due to the Icelandic financial crisis in 2008 and the publicity brought by the 2010 eruption of Eyjafjallajökull to its natural features led to a significant rise in tourism there.

Wow Air was founded by Icelandic entrepreneur Skúli Mogensen, who previously had an extensive business background largely in technology and telecoms in Iceland, Europe, and North America. The sole owner of Wow Air was Titan, an investment company owned by Mogensen, who was the company CEO and sat on the five-person board of directors. Mogensen cited a gap in the low-cost aviation market with regards to Iceland, and aimed to make it a major international transit point, repeatedly stating throughout that airline's history that he wanted Iceland to become "the Dubai of the north". According to him, the airline's name was chosen to signify his feelings toward Iceland and also because it reads "MOM" when the letters are turned upside down. Booking was opened 24 November 2011, with the airline planning to serve 12 destinations in Europe upon its operational launch the next summer.

The airline's first service, from Keflavík to Paris Charles de Gaulle, was flown on 31 May 2012. In October 2012, Wow Air acquired Iceland Express's operations and network. Iceland Express operated to several destinations in Europe and North America using leased equipment. At the end of October 2012, following the acquisition of its operations, flights to Gatwick and Copenhagen saw frequency increases, services to Berlin, Kaunas (which was later dropped again), Salzburg and Warsaw had begun.

The airline carried over 400,000 passengers in 2013 and reached its one millionth passenger in December 2014.

From 2015, Wow Air started expanding into North America, serving first the U.S., then Canada starting in May 2016. Flights to Los Angeles and San Francisco began in June 2016 using two Airbus A330-300 aircraft leased from Air Europa. Wow Air's annual passenger capacity more than doubled in 2016 to over 1.6 million, from approximately 740,000 in 2015.

Criticism of pricing claims

In 2017, Wow Air was accused of spreading false claims through churnalism, after several media outlets reported its claim that it would fly passengers from London Stansted to New York for £99, which it said was below cost. A flight leg priced at £99 was only available as part of a significantly more expensive return flight.

Peak, financial difficulties and takeover talks (2017–2018)

Despite a 58% increase in revenue from the past year, Wow Air experienced a loss in 2017 after two profitable years. Although a contemporary analysis from the Aviation Week Network pinned the results on overexpansion, expansion continued, with the airline reaching a high of 36 destinations in its network by 2018. Third quarter results that year showed a similar pattern, with increased revenues being counteracted by a larger loss margin. These issues were compounded by an increasing reputation for poor customer service. On 5 November 2018, it was announced that Icelandair Group, the holding company of rival carrier Icelandair, would acquire the entire share capital of Wow Air, subject to shareholder approval; the two airlines would continue to operate under separate names. Together, Icelandair and Wow Air have a share of around 3.8% of the transatlantic market. On 27 November 2018, Wow Air announced that it had returned four aircraft to their lessors as a sale and lease back offer fell through and the company's financial situation worsened due to stricter demands by suppliers and contractors. The four returned aircraft (two Airbus A320s and two A330s) are owned by the same company that was supposed to deliver four Airbus A330neos to Wow Air. On 29 November, Icelandair abandoned its takeover plans as the pre-conditions of the shareholders meeting were unlikely to be met.

The same day, Indigo Partners, which has stakes in several ultra low-cost carriers, reached a preliminary agreement to buy Wow Air. Shortly after, Wow Air announced major adjustments to its operations: the staff was reduced by 360 down to about 1,000, a further five aircraft (four Airbus A321s and the remaining A330) were to be phased out and the A330neos ordered would be cancelled. Wow Air thus ended its routes to Delhi, Los Angeles, San Francisco (which was seasonal) and Vancouver (which was to be introduced as a seasonal route in 2019). In January 2019, Wow Air disclosed that Indigo's investment would initially correspond to a 49% shareholding, with the option to increase at a later date.