PLAY Airlines to Cut North American Routes, Shifts Focus to Europe; Applies for Maltese AOC

Icelandic low-cost carrier PLAY is making significant changes to its route network as it projects lower-than-expected earnings for 2024. The airline will scale back its North American operations and shift focus toward point-to-point leisure routes between Iceland and Southern Europe, where it has seen rapid growth throughout 2024.

PLAY’s earnings from its hub-and-spoke transatlantic operations have been disappointing this year, as competition has increased on key routes, driving down yields. The airline currently serves five North American destinations: Boston (BOS), Baltimore/Washington (BWI), Washington Dulles (IAD), New York-Stewart (SWF), and Toronto/Hamilton (YHM). These routes will see capacity reductions starting immediately, with a larger pullback expected in 2025.

From November 1, 2024, Miami-based GlobalX will take over operations of PLAY's five North American routes until March 31, 2025. The continuation of these routes beyond that date is uncertain.

PLAY has been rapidly expanding its European network throughout 2024, adding destinations such as Madeira, Pula, Split, Valencia, Faro, Aalborg, Cardiff, Marrakech, and Vilnius. The airline also announced its first flights to Turkey, starting in April 2025, with a new route from Iceland to Antalya.

In line with these network changes, PLAY has applied for a Maltese Air Operating Certificate (AOC) and plans to station part of its fleet outside of Iceland for the first time. The airline expects to have the AOC in place by spring 2025, with the first aircraft under the Maltese AOC to be based in Tenerife. This aircraft will operate flights to Iceland as well as other destinations.

PLAY plans to maintain six to seven aircraft under its Icelandic AOC, while three to four will operate under the Maltese AOC. The airline also mentioned leasing one aircraft to Miami for temporary operations, with further projects in the pipeline.

Despite these shifts, PLAY's financial position remains secure, and there are no immediate plans to raise additional capital. However, the company expects its earnings before interest and tax (EBIT) for 2024 to be lower than in 2023. CEO Einar Örn Ólafsson emphasized that the airline will focus on its successful point-to-point operations between Iceland and Southern Europe, which have proven profitable.

PLAY will provide further updates on these changes during its Q3 presentation scheduled for October 24, 2024.