PLAY Posts $13.3m Loss, Begins Alterations to Strategy

LONDON – Icelandic low-cost carrier PLAY has posted a loss of $13.3m for Q122, resulting in some alterations to its strategy for the upcoming Summer ahead.

In the first quarter, the airline handled around 60,000 passengers, which is broken down into the following months:

January: 13,488 passengers (Load factor of 55.7%).
February: 19,686 passengers (Load factor of 67.1%).
March: 23,667 passengers (Load factor of 66.9%).

To date, the airline has handled around 230,000 passengers. Although the carrier has posted a loss, they do not have any external interest-bearing debt.

Jonsson’s Comments…

Commenting on the results was Birgir Jonsson, the CEO of PLAY:

“As we close the first quarter of 2022, we see and feel a growing demand in the market and a great response to our new destinations. PLAY has clearly gained momentum, market share, and strength very quickly.”

“After a challenging winter, it is good to see this positive feeling materialize in an increased load factor and a growing number of passengers month after month.”

“This quarter, we took steps towards expanding our fleet, staff number, and network, and we are confident that we are increasing our capacity at the right time as market demand has clearly recovered.”

“PLAY will start operations in twelve new destinations in Europe and the U.S in May and June. This means that in summer 2022, PLAY will serve 26 destinations on both sides of the Atlantic, so it is safe to say that we have some very exciting times ahead.”

“PLAY is heading into the spring and summer with a strong booking and financial position. We expect that utilization will continue to improve in the coming months with the addition of the VIA market to PLAY’s network as we have started connecting cities in Europe and the United States.”

“The team at PLAY has worked tirelessly towards the goal of launching the transatlantic operation as well as our many new European destinations, and it has been great to watch all the pieces come together thanks to their precision, professionalism, and skills”.

Strategy Alterations…

With losses being much higher than the $400,000 recorded for the same period last year, the airline is taking steps to make alterations where appropriate.

For example, the airline has started the process of fuel hedging, whereby being conservative with fuel usage should begin to bring costs down.

Instead of leasing an Airbus A321neoLR, the airline will add another A320neo which the airline dubs to be under “more favorable terms”, which will enable the airline to secure an even lower cost base in the long-term.

PLAY has also taken the decision to scrap its services to Orlando, which was supposed to commence on September 30.

This means that the airline’s fleet will consist of three Airbus A321neos and three A320neos respectively.

Overall…

Regardless of the cost-cutting measures being taken already, this is all to set PLAY up sufficiently for the upcoming Summer 2022 season.

However, fuel hedging is going to be a major factor in determining whether losses will increase, or whether the airline can reduce it and aim for a level of profitability.

It will be interesting to see how the airline performs over the Summer, as this will form the foundation of survival going into the Winter 2022/23 schedule.