Icelandic low-cost airline PLAY has released the strong set of results for the first quarter of 2023, showing the airline enjoyed robust revenue growth and strong forward bookings.
Typically, the first quarter of the New Year becomes a challenge for airlines with the attendant costs and resources required for putting preparations into play for the upcoming summer peak travel season. Despite this, the airline previously showed very promising signs; turning in a strong March performance.
PLAY CEO Birgir Jónsson noted this consideration in his overview of the airline’s first quarter performance, saying: “We are pleased to report that the performance in the first quarter was in line with our expectations and delivered healthy growth and positive developments in key areas.”
“We see very positive signs for the year as our booking flow is very strong, costs are under control and major external factors such as oil prices have been developing positively.”
“A clear sign of this is the fact that we can report a positive cash flow after the first quarter, which is an important achievement for a young airline in a ramp-up phase.”
Q1 2023 key results
Passenger uplift and performance
The first three months of the year saw the airline carry 212,000 passengers, which was four times more than the same period last year. Load factor across the period came in at a very acceptable 78.4%, which is reasonable for a lower demand period.
Attendant with this, PLAY recorded a very impressive on-time performance of 85.5%, showing that operationally they were up to the challenge of the increased passenger through flow.
Revenue and profitability
Jónsson stated that with respect to profitability, the airline sees “very positive signs for the future.” He sees the next quarters of the year developing well and ending in a positive operating profit for the full year.
In the quarter PLAY experienced record sales. The airline reports positive development in working capital resulting in an increase in cash, ending the quarter with a healthy cash position of USD 37.6 million.
“We must bear in mind that PLAY is in the process of increasing its yearly revenue up to twenty times compared to 2021, ending the year 2023 with revenue of around USD 280-320 million,” reminds Jónsson.
In Q1 PLAY has shattered previous records for ticket sales, leading to an increase in forward unit revenue.
Forward bookings remain strong, with significantly improved booking status compared to the same period last year.
Riding on the back of this forward momentum, PLAY is also planning further expansion of the route network with 37 destinations planned for 2023, including thirteen new ones.
PLAY has added more capacity to existing popular leisure destinations in Southern Europe due to high demand, with year-round services to Lisbon, Barcelona and Madrid and the service to Athens has been extended.
Jónsson sums up the position by saying: “We are now entering the most exciting and fun times of the year for us at PLAY, when we welcome around 200 new colleagues to the team, put 4 brand-new aircraft into operation, and launch many new destinations.”
“The market is receiving us with open arms, as demonstrated by the fact that we see our average revenue growing even as we have nearly doubled our capacity.”
PLAY looks poised to continue its growth trajectory in terms of average yields and ancillary revenue, positioning themselves well to meet set goals for the year. Forward bookings remain strong, with a significantly improved booking status compared to the same period last year.