Play reports third-quarter profit amid intensified competition in airline market

The increased competition in the airline market has negatively impacted Play’s financial situation. The airline reported a third-quarter profit of $3.6 million, equivalent to around 500 million Icelandic krónur. However, it is anticipated that the company’s operational performance this year will be weaker than last year due to intensified competition on transatlantic routes.

Significant changes are on the horizon for Play’s business model. The airline plans to cut back on transatlantic connections, focusing instead on profitable sun destinations, including flights from Iceland to Southern Europe, North Africa, and Asia. The share of sun destination flights is set to increase from 25% to 35% of operations, while connecting flights will decrease from 75% to 30%.

Play has also applied for an airline operating license in Malta, aiming to adapt to changing market conditions with new projects and aircraft leasing. The airline will continue to operate six to seven of its ten aircraft under its Icelandic operating license over the next 12 to 18 months.

Despite these changes, CEO Einar Örn Ólafsson emphasized that Play will remain an Icelandic company, maintaining its headquarters and core operations in Iceland. He expressed confidence that these adjustments will yield profitable results and looked forward to delivering positive news to investors and providing Icelanders with more sun destinations at better prices.

In the third quarter, Play transported over 500,000 passengers, achieving a seat occupancy rate of 89% and on-time performance of 89% as well, making it the most punctual airline at Keflavík Airport. However, total revenues dropped by 8.8% from last year, influenced by a 9% decline in average ticket prices due to increased Atlantic flight competition.