Iceland’s PLAY Makes Drastic Cuts To North America & Strikes Partnership With GlobalX In Miami

Iceland-based low-cost carrier PLAY Airlines has announced fundamental changes to its business model, with the airline moving away from connecting passengers between North America and Europe via Iceland.

Disappointing yields

PLAY detailed that while flights between Iceland and Southern Europe have been popular and profitable since its inception in June 2021, its flights as part of its hub-and-spoke model have been disappointing.

The airline underpinned its strategy by connecting passengers from North America to its European destinations via Keflavik International Airport (KEF).

While at first glance, this seemed like a similar model to the now-bankrupt WOW Air, one of the key differences is that PLAY only operates narrowbody jets, which have not strained the company’s finances as much as twin-aisle aircraft that were operated by the other Icelandic carrier.

Photo: PLAY

However, recently, yields on this part of its business have deteriorated, especially in 2024. According to the carrier, the market in North America has changed substantially with the general increase in supply, which has negatively affected PLAY’s financial results.

Thus, PLAY will “significantly cut” its capacity to North America, with the adjustment already being underway. The Icelandic low-cost carrier will continue this process in 2025, and the number of destinations it will serve in North America and Northern Europe will decrease by mid-2025.

PLAY will emphasize its destinations in Southern Europe. The airline said that passengers who have already booked flights will have no or minimal impact.

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The airline only serves four American routes.

Maltese certificate

At the same time, considering Iceland’s small market size, PLAY decided to pivot toward, presumably, the aircraft, crew, maintenance, and insurance (ACMI) or wet lease market.

“PLAY’s first project of this nature will be for the US carrier GlobalX in Miami, running from November 1 to March 15.”

To support this move, PLAY has applied for an air operator’s certificate (AOC) in Malta, which should be completed by spring 2025. The first Malta-registered aircraft will be moved to Tenerife, Spain, from where the aircraft will fly to Keflavik and Akureyri International Airport (AEY).

Photo: Vincenzo Pace | Simple Flying

Going forward, six to seven of its aircraft will be registered in Malta, while three to four will be based in Iceland.

Currently, PLAY has ten aircraft in its fleet: six Airbus A320neo and four A321neo aircraft, according to ch-aviation data.

The airline said that while its financial position remains secure, with no plans to raise additional capital, its earnings before interest and taxes (EBIT) in 2024 will be down year-on-year (YoY), a change compared to its previous guidance.

“The increase in capacity across the Atlantic in spring and summer 2024 had a greater negative impact than initially anticipated.”

PLAY said that further details will be unveiled during its Q3 earnings call on October 24.

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The airline’s next general meeting is at the end of March.

Shifts in the transatlantic market

Einar Örn Ólafsson, the chief executive officer (CEO) of PLAY, explained that transferring passengers via Keflavik was no longer as profitable, resulting in a shift in the airline’s business model.

“In short, we will focus on the aspects of our business that have proven both successful and profitable—namely, transporting passengers between Southern Europe and Iceland.”

Photo: PLAY

Ólafsson added that it will temporarily lease one aircraft to GlobalX, with the carrier also working on another year-round project that could be announced soon.

The CEO concluded that these changes will allow PLAY to grow and ensure that it remains a top choice for passengers.

Data from the aviation analytics company Cirium showed that so far, the only recent YoY changes have been on flights from Keflavik to New York Stewart International Airport (SWF) and Dublin Airport (DUB).

The airline has reduced the number of weekly frequencies to Stewart International by two in October and weekly flights to Dublin Airport (DUB) by one in November.

At the same time, the current October schedule showed that PLAY should operate ten fewer weekly flights (24 versus 34) YoY to the United States and its only Canadian destination, John C. Munro Hamilton International Airport (YHM). Its full North American destination map is displayed below: