Icelandic budget carrier Play has turned in a heavy full-year loss, but insists the overhaul of its business model is starting to show results.
The airline generated a net loss of $66 million for 2024 – approaching double the previous year’s $35 million – on revenues which were up 4% to $292 million.
It attributes the weak performance to a “disappointing” summer, with overcapacity on the North Atlantic market and the effects of seismic activity earlier in the year.
But Play states that its fourth quarter demonstrated a “positive shift” following its disclosure last October that it would move away from hub-and-spoke operations to focus on leisure traffic, charters and wet-leasing.
The carrier claims evidence of an “improving trajectory” at the end of last year, as a result of the decision.
Over the fourth quarter Play’s revenue declined 10% to $59 million as it reduced the number of aircraft in its scheduled operation.
But its operating loss for the three months reduced by 23% to $15.3 million, and its pre-tax loss also improved – although the net loss more than doubled to nearly $40 million, owing to a write-off of deferred tax assets.
Load factor, passenger yields and unit revenues were all up in the fourth quarter.
Play states that the point-to-point part of its network was profitable last year, and that it will represent an increased share of 30% of its capacity in 2025.
The carrier, which operates 10 Airbus A320neo-family jets, says its fleet is in “high demand” and that it has agreed a long-term wet-lease of three aircraft for a European airline running to 2027.
While wet-lease, it claims, has “traditionally been dominated” by 12- to 20-year old aircraft, the economic model is changing owing to a growing need for aircraft and flexible operations – with the result that newer airframes are becoming “more attractive”.
As part of the new business model Play will deploy part of the fleet outside of Iceland, and it expects to complete the process of obtaining a Maltese air operator’s certificate by spring this year.
Aircraft operating under this AOC – about three or four in total – will not be based in Malta, but will fly from other European stations.
Play says its board “firmly believes” that the changes in its business, which will take effect from the second quarter of this year, will “significantly” improve the company’s economics, and that further capital increases will not be required this year.
