Naslov
THE IMPACT OF WOW AIR

Autori
Raven Dungal, Hrafn ; Rančić, Nenad ; Pilipović, Ozren

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
INTERDISCIPLINARY MANAGEMENT RESEARCH XVI =INTERDISZIPLINÄRE MANAGEMENTFORSCHUNG XVI / - , 2020, 1041-1053

Skup
INTERDISCIPLINARY MANAGEMENT RESEARCH XVI INTERDISZIPLINÄRE MANAGEMENTFORSCHUNG XVI

Mjesto i datum
Opatija, Hrvatska, 07.05.2020. - 09.05.2020

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
Airline industry, Icelandic Economy, Skúli Mogensen, WOW air.

Sažetak
The aim of this paper is to investigate and present the case of the rise and fall of Icelandic WOW air, one of the greatest examples of how a fast-growing, large company can either make or break a small nation’s economy. It was founded in the wake of the massive tourism wave in November 2011 by Icelandic entrepreneur, Skúli Mogensen whose extensive business background is largely in technology and telecoms, but not in the airline industry. Its stellar and exponential growth ended abruptly in less than a decade. On 28 March 2019, WOW air announced that it was ceasing all its operations. By that time, it was so large that due to the market share of WOW air the loss of flights harmed Iceland’s tourism and fishing-dependent economy. WOW Air brought almost 1/4 of all visitors to Iceland, and its failure caused tourist visits to drop 16%, causing further decline in a vacation home and hotel construction. It seems that the Icelandic booming tourism industry was largely driven by “unsustainable” low airfares. On the other hand, it had helped Iceland’s recover from the finan-cial crisis of 2008 much faster than it otherwise would have, so economic and social implications of WOW air crash are still to be judged properly. The “fatal” mistake of WOW air management was in trying to turn the airline into a global business that offered cheap flights between Europe and the US via Iceland. The main problem seemed to have been that WOW grew too much and too quickly for its own good, and on top of that external circumstances turned against them quickly, with rising capital equipment costs and other expenses, namely wages and oil prices, as well as coping with rather stiff competition.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija, Pravo

POVEZANOST RADA