LONDON – Last week the Icelandic carrier, PLAY, has announced that they have achieved their first ever operating profit during their third quarter (Q3) of 2022.

The Q3 Results

For the first time in its history of operations since starting back in June 2021, PLAY has recorded its first ever operational profit (EBIT) of $1.3 million during Q3 2022. In terms of revenue the carrier has recorded $59.9 million this quarter, which is $27.4 million above what they achieved in Q2 2022.

Despite the profit during this quarter however, the carrier is expecting that their second half results and full year results will still have a negative EBIT.

Alongside the profit that PLAY had achieved during this quarter, their load factor was also satisfactory with an average load factor of 85% for the quarter, with October alone achieving a load factor of 81.9% with the carrier taking on approximately 92,000 passengers during October alone.

For the entirety of Q3, PLAY carried a total of 311,000 passengers and for their entire year of 2022, they are expecting to have carried around 800,000 passengers which works out at approximately 65,000 to 70,000 passengers per month on average.

In terms of their current liquidity state, PLAY sits comfortably on cash and cash equivalents of $29.6 million, which includes unrestricted cash with an equity ratio of 12.1% given that PLAY has no external debt.

Looking forward into the new year (2023) PLAY is forecasting a drastic passenger count increase from between 1.5 to 1.7 million passengers for the entire year. This is a coupled with an expected turnover of between $310 to $330 million which would equate to the carriers first ever full profitable year of operations.

PLAY Senior Comments

PLAY’s Chief Executive Officer, Birgir Jónsson has commented on the carriers first profitable quarter, saying, “This was the first quarter where we had our full transatlantic operation up and running. Since the majority of our destinations were brand-new to our network, the PLAY brand was mostly unknown in these markets.”

“I feel that it is a significant achievement for such a young company to have made an operational profit (EBIT) under these circumstances and that it is not something to be taken for granted. Our load factor in the quarter was very acceptable at 85% for a new market entrant and seeing that trend continuing into the winter months is a good sign.”

“We will not reach our previously stated target of achieving a positive operational profit in the second half of this year. We would have wanted to see a stronger outcome in the quarter, but we have been battling a very challenging external market environment which has negatively impacted our financial performance.”

“Fuel prices have continued to stay at high levels, and the general demand was lower than anticipated in late summer and fall. This was especially evident for passengers coming to Iceland as the Icelandic tourism industry seemed to be at maximum capacity with hotel and rental cars either fully booked or prohibitively expensive.”

“We’re already seeing positive change in this regard for next year but also acknowledge that the continuing economic uncertainty in our markets will likely impact demand. The takeoff for PLAY has been very successful in many ways but it must be said that the external business environment has made the financial takeoff heavier for us than we had hoped.”

“Fuel prices and other significant factors have not worked in our favor. Therefore, we are not satisfied with the financial performance of the company this year. We do, however, see many positive signs in our business, and we fully anticipate seeing a positive operational profit in 2023 as our revenue base matures and we become more established in our operation and markets.”

“The fabulous PLAY team is already hard at work preparing for our next expansion phase and is hiring people, receiving four additional aircraft, and adding new destinations to our network. I look forward to the future as we are already seeing PLAY grow into a strong and profitable low-cost airline with a growing revenue base and happy customers.”

Overall

It is great to see such a young and new carrier doing well and this certainly paints a bright picture for PLAY’s future. With a steadily growing fleet and destinations list, PLAY is certainly PLAY-ing it safe to ensure they maximise their full profitability.