PLAY Airlines announces increase in revenue for Q2

PLAY Airlines has announced its Q2 financial results, having carried 442 thousand passengers in Q2 2024, compared to 392 thousand passengers in Q2 in 2023, a 13% increase year-on-year. The increase is especially notable as PLAY’s load factor also increased year-on-year, from 85% in Q2 2023, to 86% in 2024. At the same time available seat kilometers (ASK) increased by 12% between years. Of the passengers flying with PLAY in Q2, 31% were flying from Iceland, 25% were flying to Iceland and 44% were connecting passengers (VIA). Q2 was operationally successful. PLAY had an 89% on-time performance in the quarter, which is beyond the airline’s full-year target of 85%.

10 aircraft were operated in Q2 2024, compared to 9 aircraft in Q2 2023. 36 destinations were in operation in Q2 2024, compared to 34 in Q2 2023. PLAY started flights to Vilnius in Lithuania and Split in Croatia in Q2 and started flying again to many seasonal leisure destinations in Europe.

PLAY has expanded its partnership with Dohop with the launch of PLAY Connect, which taps into new demand by connecting PLAY’s network with several airline partners. This allows PLAY to offer its customers connections worldwide. Since launching in mid-May, passengers have booked one-stop connections, for example to Texas and Cyprus which are not served directly from Iceland.

In addition, PLAY also announced partnership with GO7 to broaden its distribution capability. PLAY is now live in the major global distribution systems (GDSs) worldwide through GO7, enabling travel agencies around the globe to book PLAY‘s flights. While the partnership is relatively new, early signs in markets that are more accustomed to GDS distribution are positive.

PLAY airlines was recognised as the top low-cost airline in Northern Europe in Q2 for the second consecutive year by the prestigious World Airline Awards, based on customer satisfaction. These awards have been conducted since 1999 by the British company Skytrax through customer surveys and are coveted quality accolades. In addition, PLAY has been listed among the top 100 airlines in the world for the second year in a row, moving up 4 places from 91 in 2023 to 87 in 2024 and is the only Icelandic airline on the top 100 list. In 2022, PLAY was ranked number 167 on the same list. PLAY also ranked third among the world’s most improved airlines at the same awards.

Financials
Total revenue for Q2 was USD 78.3 million (£61 million), compared to USD 73.1 million (£57 million) last year, up 7.1% between years at the same time as ASK increased by 12%. Ancillary revenue increased by 18% between years, from USD 20.6 million (£16 million) in Q2 2023 to USD 24.3 million (£18.9 million) in Q2 2024.

Cost per available seat kilometre (CASK) increased by 3% year-on-year, from 5.23 cents (4.08 pence) to 5.37 cents (4.19 pence). Cost per available seat kilometre excluding fuel (Ex-fuel CASK) is up 8% between years, from 3.50 cents (2.73 pence) to 3.78 cents (2.95 pence). Several factors contributed to the higher unit cost. Capacity cuts in April, following the Easter ramp-up of production, drove up unit cost for the month. Maintenance costs were higher due to spare engine lease costs incurred this year, and not last year, to improve operational resilience. Airport costs were higher due to expiration of new route incentives at some airports as well as higher fees and charges in KEF and lastly marketing costs were higher due to increased marketing activity in response to a softer VIA market and lingering negative impact on demand from the seismic activity on the Reykjanes peninsula.

Total revenue per available seat kilometre (TRASK) was 5.1 US cents (3.98 pence), compared to 5.3 US cents (4.13 pence) in 2023. Yields were affected by Easter being mostly in Q1 this year, as opposed to Q2 last year, as well as the deteriorating performance of the VIA market due to increased capacity across the Atlantic, resulting in lower fares and softer demand for trips to Iceland. Unit revenue (TRASK) therefore decreased by 4% compared to last year. The European side of the network showed improving year-on-year performance whereas North America performed below last year.

Earnings before interest and taxes (EBIT) was negative USD 4.5 million (£3.5 million) in Q2 2024, compared to positive USD 0.9 million (£701,000) in Q2 2023. Despite this, there were positive signs within the quarter, as both May and especially June yielded better financial results this year than last.

PLAY’s cash position was USD 51.4 million (£40 million), including restricted cash. Positive net operating cash flow totalled 5.7 million USD. PLAY has no external interest-bearing debt.

Einar Örn Ólafsson, CEO of PLAY says:  “Q2 this year was our biggest quarter to date with 442 thousand passengers which is a 13% increase between years, 7% increase in total revenue and an 8% increase in ancillary revenue. Even with all of our operational increases, our on-time performance was 89% which makes us the most punctual airline operating departure flights from Keflavík International Airport. This is a fantastic result from my colleagues at PLAY and demonstrates the prominent level of professionalism within our team.

Overall, PLAY´s position is solid, we have improved our financial outcome every year and continue to do so while remaining a great choice for passengers looking for low fares to their favourite destinations.

Our EBIT in Q2 was hit by the lingering negative impact of the seismic activity in the Reykjanes peninsula and by the fact that Easter fell on Q1 this year. We are also fighting the development of fewer tourists visiting Iceland, which is a clear effect of a big push our neighbouring countries have done in direct marketing to consumers. They spent around 21 million Euros (£17.7 million) in tourism advertising in 2023, 92% of which was government funded. Iceland needs a big marketing effort to attract visitors to our country and I believe that it can be done with a joint effort between the Icelandic tourism industry and the government. Safety plays a key factor when tourists select their destination and the misconception of Iceland not being safe due to seismic activity needs to be reduced or preferably eliminated. That is achievable with a proper campaign aimed at consumers.”