PLAY, an Iceland-based low-cost carrier, has announced adjustments to its network, including reduced flights to Washington Dulles International Airport (IAD) and other transatlantic and European destinations.
Axing two transatlantic trips.
PLAY will cancel seasonal service resumptions from Keflavik International Airport (KEF) to two North American destinations: John C. Munro Hamilton International Airport (YHM) and Washington-Dulles.
Other cancelled flights include those from KEF to Gothenburg Landvetter Airport (GOT), Palma de Mallorca Airport (PMI), and Stockholm Arlanda Airport (ARN).
During the upcoming IATA summer season, services to Athens Eleftherios Venizelos Airport (ATH), Düsseldorf Airport (DUS), and Hamburg Airport (HAM) will have fewer weekly flights or operate for a shorter period.
During the summer season, the airline will only offer transatlantic flights to Boston Logan International Airport (BOS), Baltimore/Washington International Thurgood Marshall Airport (BWI), and New York Stewart International Airport (SWF).
Strategy change
The cuts were clearly part of the plan, as the Icelandic airline announced adjustments to its business model on October 16, 2024, to reflect market realities. As a result, it would focus on direct flights from Iceland to Europe while dramatically reducing its capacity on flights between Europe and North America.
“The point-to-point element of PLAY’s schedule, particularly flights between Iceland and Southern Europe, has been popular and successful since its inception. However, as previously noted, the airline’s yields on its hub-and-spoke business across the Atlantic have been dismal, especially in 2024.”
PLAY reaffirmed that the North American market has undergone significant changes, including an overall rise in capacity supply, which has had a detrimental impact on its financial performance. Thus, the carrier announced in advance that by mid-2025, its network would shift away from North America and North Europe and toward destinations in Southern Europe.
In addition, PLAY announced that it would file for an air operator’s certificate (AOC) in Malta, allowing it to use its aircraft in markets other than Iceland. At the time, it announced a wet lease agreement with US-based GlobalX Airlines that would run from November 1 to March 15.
Flightradar24 data indicates that one Airbus A321neo, registered as TF-PLA, has been flying flights for GlobalX from Miami International Airport (MIA) and other Florida airports.
“The process is projected to be completed by spring 2025. PLAY aims to relocate its first aircraft under the new Maltese AOC to Tenerife, where it will fly to Keflavík and Akureyri in Iceland, among other locations.
Results were worse than expected.
On October 24, PLAY released its Q3 2024 results, which were poorer than predicted. Nonetheless, the airline concluded the three-month period with earnings before interest and taxes (EBIT) of $9.6 million and a net profit of $3.5 million, which is $1.2 million less than in Q3 2023.
The airline highlighted that its dropping unit revenues were driven by strong capacity growth to/from North America, with PLAY stating that from Keflavik, there were 15% more seats to North America and 7% more seats on Transatlantic flights year on year.
Nonetheless, its cost per available seat kilometer (CASK) improved by $0.06, owing mostly to decreasing gasoline prices. PLAY’s ex-fuel CASK increased 4% YoY, according to the low-cost carrier’s Q3 earnings presentation.