Icelandic budget carrier Play is attributing first-quarter losses partly to news coverage of recent volcanic activity, which the airline claims was “inaccurate”.
Play says a $20.4 million loss before interest and tax was “heavily affected” by the coverage, although it had been expecting a negative impact.
“Now the results are in,” it states. The company turned in a net loss of $21.7 million.
Seismic activity in the vicinity of Grindavik, southeast of Reykjavik’s Keflavik airport, intensified in December last year with a volcanic eruption.
Play says its operations and sales have shown “positive signs” over the quarter, and revenues increased by two-thirds to $54 million.
“This is a true sign of how our airline is becoming more known and gaining market share,” says new chief executive Einar Orn Olafsson.
Passenger traffic for the quarter was up 70% on a 63% rise in capacity, lifting load factor to 82%.
Olafsson says the performance was ”affected significantly by a rather poor January and February – poor because of a lack of sales experienced in [the fourth quarter] last year…in most parts due to negative media coverage because of seismic activities happening in Iceland”.
Ancillary revenues more than doubled, however, contributing to a slight increase in yield.
Play is forecasting that it will break even at operating level this year. It will keep its fleet at 10 aircraft – all Airbus single-aisle models – for the period, compared with six for the first quarter in 2023.
