Icelandic budget carrier Play is pessimistic about its chances of generating an operating profit this year, owing to the rise in fuel prices.
Play had been forecasting a “narrow but positive” operating margin for the full year 2023, and the operating profit for the third quarter has proven “strong” so far.
But it says fuel prices, rather than remaining stable, have risen “considerably” – some 25% – since the second quarter.
“It is now clear that this very significant price increase, together with general price increases due to inflation, is likely to have a negative impact on the financial results this year,” says the carrier.
Play adds that it can “no longer assume” that it will achieve a positive operating result – although it states that the improvement in financial performance is nevertheless substantial, and its year-end cash position will be “healthy”.
The carrier has signed letters of intent for two additional Airbus A320neos, which are scheduled to be received in time for summer 2025.
Play has not identified the source of the aircraft. The airline is also looking to add further capacity in 2024-25 and says it is continuing negotiations.
“We continue to see many opportunities for future growth and we have therefore begun planning our growth for the coming years,” says chief executive Birgir Jonsson.
“It is good that we are still seeing higher yields than last year and a significantly higher load factor going into the more challenging winter months, and the demand going forward looks relatively robust in most markets.”
