It could be incorrect to explain Iceland’s Play Airways as a startup anymore. Launched in 2021 through the top of the coronavirus pandemic, the airline is on the cusp of its third summer season below the management of a brand new CEO.
Einar Örn Ólafsson, who ascended to the highest spot in March after serving because the chairman of Play’s board of administrators, has despatched a transparent message to buyers in his first few weeks: He’ll convey the airline into the black for the primary time ever — so long as there isn’t a volcanic eruption or surge in international oil costs to cope with.
Oh, and Ólafsson additionally occurs to be Play’s largest shareholder.
Map watching: The award for ‘sexiest new route’ of the yr goes to …
“The previous few weeks have been extra about attending to know the small print of the enterprise … entering into the nitty gritty, getting my palms soiled,” he stated throughout an interview on Monday.
Ólafsson plans no main adjustments to Play’s core technique of providing low-cost seats — every little thing else prices further — between North America and Europe by way of Reykjavik’s Keflavik Airport (KEF).
“We’re not going to take a U-turn,” he stated, including that the place he sees alternatives for adjustments are solely “small issues.”
Whereas Ólafsson was mum on what these small issues may very well be, dependable operations and profitability are high of his record. Play, which has not posted an annual revenue since its launch, goals to interrupt even this yr and submit a revenue subsequent yr, in accordance with an April investor presentation.
Play vs. Icelandair: Evaluating Iceland’s latest and oldest airways
Which means progress, not less than to North America, is off the desk in 2024. As a substitute, Play needs its North American community to mature — in different phrases, flip common income — earlier than it provides extra flights. North American locations the airline serves embody Baltimore/Washington Worldwide Thurgood Marshall Airport (BWI), Boston Logan Worldwide Airport (BOS), John C. Munro Hamilton Worldwide Airport (YHM) close to Toronto, New York Stewart Worldwide Airport (SWF) and Dulles Worldwide Airtport (IAD) close to Washington, D.C.; the service additionally flies to a different 24 locations in Europe, in accordance with Cirium Diio schedules.
From June via August, the height summer season months, Play will solely fly round 3% extra seats systemwide than in 2023, the Cirium Diio information reveals. That compares to a 67% annual soar throughout the identical interval final yr.
Icelandair, Play’s principal competitor, plans to fly greater than 5% further seats than final yr throughout the identical interval, in accordance with Cirium Diio. It can add Halifax, Nova Scotia, and Pittsburgh to its map this summer season.
Play’s US plans
“There are a number of cities nonetheless on the Japanese Seaboard, or in japanese Canada, that we want to fly to,” Ólafsson stated. Play will doubtless add three new locations on this space between 2025 and 2027, he added.
Whereas Ólafsson supplied few particulars on what Japanese Seaboard or Canadian locations Play is eyeing, he did say that future enlargement within the New York space would doubtless be to an airport apart from SWF. That might imply New York’s John F. Kennedy Worldwide Airport (JFK) and Newark Liberty Worldwide Airport (EWR) are on Play’s shortlist.
SWF is situated almost 70 miles north of midtown Manhattan, and the journey by bus or automobile takes nicely over an hour with out visitors.
Different potential locations inside the vary of Play’s Airbus A320neo household of planes embody Hartford, Connecticut, and Philadelphia within the U.S., and Halifax and Montreal in Canada.
Play plans to double in dimension, to twenty planes from 10 this summer season, in 5 years, or by 2029. After that, Ólafsson stated the airline will have a look at growing the variety of flights to present locations over new dots on its map.
Talking of planes, all of Play’s A320neos and A321neos have CFM Worldwide engines and should not affected by the problems which can be grounding lots of of planes with Pratt & Whitney engines, Ólafsson stated.
The outlook for summer season transatlantic journey demand appears “steady,” Ólafsson stated. Play sees weaker bookings within the U.S. than final yr, however that’s balanced by stronger bookings in Europe.
“Possibly there’s a way that Europe is a small continent and it’s all shut,” Ólafsson stated of the conflicts in Ukraine and Gaza when requested why he thought demand was softer in North America. He added that top rates of interest may be affecting vacationers.
Extra: These are one of the best instances to go to Iceland
Making ready for winter
Whereas eyeing future enlargement is a enjoyable train, the main focus of Ólafsson’s work at this time is rather more imminent: winter. That’s when journey demand throughout the North Atlantic and to chilly, northern climates like Iceland wanes and airways should shrink to match the market.
“The low of winter is like 60% [the demand] of the summer season,” Ólafsson stated. “We’ve got to scale up and down fairly a bit by the season.”
For North America, that would imply Play cancels flights on days when the least variety of individuals are touring — Tuesdays and Wednesdays, for instance — or suspends sure locations totally in January and February to match its schedule to journey demand.
The airline additionally plans so as to add flights to markets which can be countercyclical, or the place demand peaks within the winter. Play will add Madeira Airport (FNC) in sunny Portugal and Ras Al Khaimah Worldwide Airport (RAK) in Marrakech, Morocco, to its map along with growing flights to Spain this coming winter.
What Play does this winter will probably be a take a look at of the price range airline’s mettle. The off-season has usually been the downfall of startups as they battle to lift the money wanted to cowl bills through the gradual journey months.
However the threat of winter doesn’t fear Ólafsson at this time, not less than, not that he’s prepared to say.
“I’m fairly assured we’ll be round our steering for this yr,” he stated. “Barring any oil craziness, I’m extremely assured that we’ll have important enchancment between ‘24 and ‘25.”
Associated studying:
- The most effective time to guide flights for the most cost effective airfare
- Greatest airline bank cards
- What precisely are airline miles, anyway?
- 6 real-life methods you need to use when your flight is canceled or delayed
- Maximize your airfare: The most effective bank cards for reserving flights
- The most effective bank cards to succeed in elite standing