Play Shifts Focus To Leisure Markets, Applies For Maltese AOC
Icelandic LCC Play is implementing a major change to its business model and route network due to “disappointing” yields from its connecting traffic between Europe and North America.
Icelandic LCC Play is implementing a major change to its business model and route network due to “disappointing” yields from its connecting traffic between Europe and North America.
The airline says it plans to increase point-to-point service to leisure markets in Southern Europe while reducing its focus on connecting passengers through its Reykjavik Keflavik base to destinations in the U.S. and Canada.
“The point-to-point part of Play’s schedule ... has been popular and profitable from the beginning,” the carrier says in a statement. “However, as previously reported, the airline’s yields on its hub-and-spoke part of the business across the Atlantic has been disappointing, particularly in 2024. The North American market has changed substantially recently with a general increase in supply with a negative effect on Play’s financial results.”
In response, the airline is cutting back capacity on its North Atlantic routes, a move that is already underway and expected to continue into 2025. By mid-2025, the number of destinations in North America will therefore decrease, alongside some cuts in Northern Europe.
According to OAG Schedules Analyser data, Play currently serves five destinations in North America, offering 5X-weekly service to Boston Logan (BOS), Baltimore Washington (BWI), New York Stewart, and Washington Dulles (IAD), alongside four flights per week to Toronto Hamilton.
The airline faces direct competition from Icelandair to BOS, BWI and IAD, as well as indirect competition in the New York and Toronto markets. Delta Air Lines and United Airlines also offer flights to Reykjavik from the New York area.
In line with its new strategy, Play plans to utilize part of its fleet outside Iceland. The first project will involve a partnership with the U.S. carrier GlobalX, which will operate one Play aircraft in Miami from Nov. 1 to March 15, 2025. Play has also applied for an air operating license (AOC) in Malta and once secured, it intends to base an aircraft in Tenerife, Spain, offering flights to Keflavik and Akureyri in Iceland, as well as other destinations.
Currently, Play operates a fleet of 10 Airbus A320-family aircraft, but with the restructuring, it expects to have six or seven under its Icelandic AOC and three or four under the Maltese AOC.
“Since Play’s inception, we’ve observed shifts in the market, and it is our view that the via-route network is no longer as profitable as it once was,” says Einar Örn Ólafsson, who took over as CEO in March. “In short, we will focus on the aspects of our business that have proven both successful and profitable—namely, transporting passengers between Southern Europe and Iceland.”
Play says its EBIT for the full year 2024 is now anticipated to fall below last year’s results but it remains in a “secure financial position” and has no plans to raise additional capital.
