PLAY Airlines Seeks Maltese AOC for Point-to-Point Services
Icelandic low-cost carrier PLAY Airlines has announced a significant shift in its business strategy, aiming to improve its financial performance by seeking an Air Operator Certificate (AOC) in Malta. This change comes as the airline reassesses its current model, which has primarily focused on connecting traffic across the North Atlantic. Starting around mid-2025, PLAY will concentrate on leisure-driven, point-to-point services from Iceland, reported ch-aviation.com.
Chief Executive Einar Örn Ólafsson emphasized the need for this reorganization, stating, “Since PLAY’s inception, we’ve observed shifts in the market, and it is our view that the via-route network is no longer as profitable as it once was. As a result, we have decided to adjust our business model, focusing on transporting passengers between Southern Europe and Iceland.” This pivot is expected to enhance operational efficiency and profitability for the airline.
The new Maltese AOC is projected to be completed by spring 2025. Under this new structure, PLAY plans to operate a smaller fleet based in Malta, consisting of three to four aircraft, while maintaining six to seven aircraft under its existing Icelandic AOC. Currently, PLAY’s fleet includes six A320-200Ns, three A321-200Ns, and one A321-200NX, as per ch-aviation data.
The first aircraft registered in Malta will be stationed in Tenerife Sur, operating flights to Reykjavik Keflavik, Akureyri, and additional destinations outside of Iceland. This strategic move will enable PLAY to utilize a portion of its fleet outside Iceland, thereby expanding its operational reach.
In conjunction with its fleet adjustments, PLAY is set to embark on an ACMI (Aircraft, Crew, Maintenance, and Insurance) contract with GlobalX, a U.S. charter airline. This partnership will involve wet-leasing one of PLAY’s aircraft to operate leisure charters out of Florida from November 1, 2024, to March 15, 2025. “We are exploring a year-round project that we hope to announce soon,” Ólafsson added, indicating future expansion plans.
As PLAY pivots to focus on point-to-point services, it will de-emphasize its operations connecting North America and Europe. The airline has observed that the yields from via traffic have been disappointing, particularly this year, partly due to increased capacity from carriers offering direct transatlantic flights. As a result, PLAY has begun reducing its capacity on North American and North European routes, with further adjustments anticipated through 2025.
Currently, PLAY serves four destinations in the United States: Boston, Newburgh, Baltimore International, and Washington Dulles, along with Hamilton, Ontario, in Canada. Despite acknowledging that its full-year EBIT result for 2024 is expected to be worse than in 2023, the airline remains confident in its financial stability and has no immediate plans to raise capital. In April 2024, PLAY successfully secured new capital, and its financial position continues to be secure.
In 2023, PLAY recorded a net loss of $35 million, a slight improvement from the $47.8 million loss in 2022. In the first half of 2024, the airline reported a net loss of $29.2 million, further highlighting the challenges it faces in the competitive airline market. However, the shift to a more focused business model may help PLAY regain its footing and attract a growing leisure travel market.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com