PLAY Airlines has announced a major strategic pivot, focussing on direct leisure routes between Iceland and Southern Europe. At the same time, the Icelandic low-cost carrier will be scaling back its transatlantic flight operations.
This fundamental shift comes as the airline adapts to changing market dynamics. By making the quantum shift, it seeks to optimize its profitable routes in an increasingly competitive aviation landscape.
The Iceland-based carrier has identified the best performing sectors of its network. Its point-to-point leisure routes, particularly those connecting Iceland with Southern European destinations, have consistently delivered strong performance and profitability since launch.
In contrast, the airline’s hub-and-spoke model connecting North America and Europe has faced significant challenges, especially throughout 2024.
Recent increases in transatlantic capacity across the industry have negatively impacted PLAY’s yields, prompting this strategic reassessment. The airline plans to substantially reduce its North Atlantic operations, with changes already underway and set to continue into 2025.
This decision reflects the airline’s agility in responding to market conditions and its commitment to maintaining profitable operations.
By mid-2025, PLAY will operate fewer routes to North America and Northern Europe, redirecting resources to strengthen its successful Southern European leisure markets. The airline assures that these changes will have minimal to no impact on existing bookings, supporting customer service during the transition.
In a significant development, PLAY has applied for an Air Operating License (AOC) in Malta. This is now expected to be approved by spring 2025. This expansion will enable new operational opportunities, including: A temporary partnership with U.S. carrier GlobalX in Miami (November 1 – March 15), New routes from Tenerife to both Keflavík and Akureyri in Iceland, Distribution of fleet between Icelandic (6-7 aircraft) and Maltese (3-4 aircraft) operations, Potential for additional year-round projects to be announced.
Despite the strategic shift, PLAY maintains a secure financial position with no immediate plans for capital raising. However, the airline has revised its 2024 earnings forecast, expecting EBIT to fall below last year’s results.
This adjustment reflects the greater-than-anticipated impact of increased transatlantic capacity during spring and summer 2024. The company remains confident that its strategic realignment will strengthen its long-term financial performance.
Einar Örn Ólafsson, PLAY’s CEO, stresses the airline’s commitment to serving the Icelandic market while adapting to industry changes. We’re focusing on what works best connecting Iceland with Southern Europe. This model has proven both successful and profitable, he states.
The CEO’s vision includes maintaining PLAY’s position as the preferred carrier for Icelandic travelers while expanding its presence in key leisure markets.
PLAY Airlines will present detailed plans during its Q3 presentation on October 24. The airline’s refined strategy aims to leverage its strengths in the leisure market while maintaining operational flexibility through its dual-AOC structure.
This approach positions PLAY to capitalize on seasonal demand patterns and explore new revenue opportunities. The strategic realignment positions PLAY to better serve its core markets while maintaining operational efficiency.
By focusing on proven profitable routes and exploring new opportunities through its Malta-based operations, PLAY aims to ensure sustainable growth in an evolving aviation landscape. The airline’s adaptability and focus on profitable market segments suggest a promising outlook for its revised business model.
