Play is an Icelandic low-cost airline that began commercial flights in 2021. Its strategy follows that of WOW Air, another Icelandic low-cost carrier that collapsed in 2019. While WOW Air’s failure doesn’t necessarily mean the strategy itself is flawed, it’s crucial for Play to learn from its predecessor’s mistakes. Essentially, Play’s approach mirrors that of Icelandair, which has successfully connected North America and Europe using narrow-body aircraft with layovers at Keflavik Airport in Reykjavik. The key difference is that Icelandair is a full-service carrier, offering both business and economy classes, while Play and WOW Air have only operated as low-cost airlines, offering a single economy class with free hand luggage and additional services charged separately.
Play started its operations in 2021 with just three aircraft, but its fleet has since expanded annually. By 2024, it had grown to 10 aircraft, including six A320neo and four A321neo models. Initially, Play operated flights solely to Europe, but in 2022, it began launching routes to North America.
In North America, Play serves lesser-known airports, such as Hamilton near Toronto and Stewart International Airport near New York. This allows the airline to avoid the higher costs associated with major airports in these cities, a hallmark of low-cost carriers in Europe, although many now fly to major airports as well.
In 2023, Play carried around 1.5 million passengers, with an impressive load factor of 83.4%. Nearly half of these passengers were transatlantic travelers stopping over in Reykjavik, meaning approximately 750,000 passengers used Play for travel between Europe and North America.
Play’s CEO, Einar Örn Ólafsson, has indicated a shift in strategy, moving away from focusing on transatlantic routes toward connecting Iceland with “warmer” destinations in Southern Europe. The motivation for this change is the weak profitability of transatlantic flights. Although there is demand for Play’s services, increased competition and more narrow-body aircraft entering the market have made it difficult for the airline to raise prices enough to boost profits.
This strategic shift might be a smart move, as competition in transatlantic traffic is intensifying, with only the largest carriers likely to survive. Norwegian, for example, had to abandon transatlantic flights to stay afloat, and Norse Atlantic Airways is also facing financial challenges. Play, meanwhile, has joined Worldwide by easyJet, a platform that offers passengers the option to book tickets on multiple airlines that may not have formal partnerships, such as codeshare agreements. This enables Play to offer passengers a wider range of destinations through partners, rather than relying solely on its own flights.
Initially, Play focused on major European cities like London, Amsterdam, Dublin, and Copenhagen, primarily serving Northern and Western Europe. It later added sunny destinations in Spain and, surprisingly, Athens. This year, Play introduced flights to Split during the summer and added Madeira and Marrakech as winter sun destinations. For 2024, new destinations include Pula, Valencia, and Faro, with Antalya being one of the biggest surprises. Play has previously flown to the Canary Islands and Portugal.
This new set of destinations signals the beginning of Play’s strategic pivot. It’s not surprising, as Icelanders long for sun and warmer climates, and Play has wisely tapped into that demand. While Icelandair also serves some of these warmer destinations, its primary focus remains on transatlantic traffic. With less competition on these sunny routes, Play can charge higher prices, achieve better load factors, and, hopefully, increase profits. While the strategy appears promising, it will take a year or two to see if it pays off. A challenge remains, however: Iceland’s population is just under 400,000 people.
Even if every Icelander made a round trip with Play each year, that would only account for 800,000 passengers, which is equivalent to Play’s transatlantic traffic alone. Of course, international tourists visiting Iceland also contribute to the airline’s passenger numbers, but the limited domestic market likely influenced Play’s decision to adjust its fleet strategy.
For the winter season from November 1, 2024, to March 15, 2025, Play plans to lease one aircraft to GlobalX in Miami. Additionally, Play is pursuing an Air Operator Certificate (AOC) in Malta, following in the footsteps of airlines like Ryanair, Wizz Air, and Lauda. Play plans to base three or four aircraft under the Maltese AOC, while six or seven will remain under the Icelandic AOC. The aircraft in Malta will be stationed in Tenerife, flying to Keflavik, Akureyri in Iceland, and other, as yet unspecified, destinations. The full details of this expansion are not yet clear, but additional routes outside Iceland may be expected.
Although Play reassures stakeholders that its finances are stable, the airline still expects a lower operating profit compared to last year when it reported a $21 million loss. So, another year in the red is expected.
This change in strategy is an attempt to return to profitability. Only time will tell if these bold moves will pay off.
