PLAY (Iceland) (OG, Reykjavik Keflavik) will not be adding any new aircraft in 2024 and terminated its two LOIs for dry leases of aircraft due in 2025, prioritising to shore up its financial liquidity given the current market environment.
"The last few months have shown us that external factors are something that we need to take into account and we basically need a buffer for those fluctuations. We will operate ten aircraft this year, and we will optimise the business, really turn the screws and basically get ourselves stabilised after this massive growth period, and we will prepare ourselves for the next phase of growth," Chief Executive Birgir Jónsson said during the quarterly investor call.
He stressed that 2023 "was looking to deliver very acceptable financial results" before the second half of the year brought about a number of external headwinds, including the Gaza crisis, the spike in oil prices, inflationary pressures on costs, and, locally, volcanic eruptions that scared foreign tourists from visiting Iceland. As a result, the carrier posted a USD35.2 million operating loss in 2023.
By pausing the capacity growth for 2024, the airline aims to boost its capital. Jónsson stressed that "in a stable environment", this would not have been necessary. This will be the first year in the Icelandic LCC's history when it will not grow its fleet.
Despite the termination of the two LOIs for 2025, PLAY still plans to increase its fleet from the current 10 to 12 aircraft by the end of the next year. In the long-term plan through 2029, the carrier's plan assumes an 18-20-strong fleet.
As a part of its capital-raising measures, PLAY plans to uplist from the First North Growth Market to the Nasdaq Main Market in Iceland, hoping to attract fresh capital and a broader range of shareholders. While the plan has yet to be approved by shareholders, who will meet on March 21, 2024, PLAY experts to issue ISK3-4 billion Icelandic krónas (USD21.8-28 million).
PLAY aims to break even on the operating level in 2024 and post EBIT profit in 2025.
The ch-aviation fleets module shows that PLAY currently operates six A320-200Ns, three A321-200Ns, and one A321-200NX. Under its previous, more aggressive fleet plan, it wanted to add four new aircraft instead of two in 2025 and was evaluating leasing one in 2024.
