Evaluation of airline cost structures and cost savings at low-cost carrier WOW air.

Abstract

This paper was carried out to identify whether the low-cost airline WOW air is operating their aircraft at the optimum cost index or not. The purpose was to calculate the indexes specifically for WOW air’s operation and estimate possible savings. Therefore the cost indexes for the aircraft fleet were calculated in two groups: Wet- leased aircraft group A320s and company owned aircraft A321s. The result showed that the cost indexes in average are 45 for the A320s and 9 for the A321s, instead of the currently used values of 30/15 and 35 correspondingly. Overall the projected savings with the new indexes have been calculated to be approximately half a million USD annually.