http://www.cbc.ca/news/business/wow-air-discount-airline-iceland-1.3251746
The article is about Discount airlines like Ryan Air, Air Lingus, EasyJet and others having success in offering short-haul flights between destinations in Europe. These companies all are low-cost carriers which are becoming more and more popular these days WOW says its passenger loads were up by 45 per cent in June and August compared to the same period last year.
The company WOW Air is only 4 years old and is expending quickly overseas. According to Poter, this is a perfect example of Cost Leadership Strategy as the company has recently launched flights from Toronto and Montreal to Europe and Iceland for surprisingly cheap price: 99$ one-way ticket. The price is definitely below the average so it could be easily seen that it provokes the event of a price war. As WOW Air has a huge demand while other companies experience huge losses that’s why it is defendable against substitutes.
However, not everything is as good for the customer as from the first sight it seems to be. To starts with, such a huge difference in price between companies is a result of cutting on the comfort services and opportunities for the tourists. For example: baggage restrictions or hidden fees (taxes, insurance cost, ect).
