PLAY to add flights to Stockholm Arlanda, posts an operating profit

Play Airlines will add the Keflavik – Stockholm (Arlanda) route on March 31, 2023.

The new route will operate four days a week.

On the financial side, the airline issued this financial statement for the third quarter:

PLAY carried around 311 thousand passengers in Q3 and anticipates around 800 thousand passengers this year.

●       Revenues in the quarter were USD $59.9 million compared to USD $32.5 million in Q2.

●       In 2023 PLAY forecasts 1.5 to 1.7 million passengers with a turnover of $310 to $330m USD and a positive operating profit from the full year.

●       Load factor in Q3 was very acceptable at 85%. The load factor for October was 81.9% when PLAY carried approx. 92 thousand passengers.

●       The financial position of the company is strong. Cash and cash equivalents on September 30 amounted to USD $29.6 million including restricted cash. The equity ratio was 12.1% and the company has no external interest-bearing debt.

●       Earnings before interest and taxes (EBIT) were positive in Q3 2022 in the amount of USD $1.3 million. EBIT will be negative in the second half of the year and for the full year.

●       PLAY’s guidance for 2022 has been updated and the company forecasts an annual turnover of approx. USD $140 million this year.

●       PLAY’s cost target of being under 4 US cents a unit (CASK excl. fuel), was more than achieved and was 3.1 US cents in Q3.

●       27 destinations are currently on sale.

PLAY had an operating profit (EBIT) in Q3, with a load factor of approx. 85% and around 311 thousand passengers flown. PLAY expects passengers to be around 800 thousand in 2022 and between 1.5 to 1.7 million in 2023.

PLAY expects the annual turnover for 2023 to be USD $310 to $330 million and the company forecasts a positive operating profit (EBIT) for the full year.

PLAY will not reach its previously stated target of achieving a positive operational profit (EBIT) in the second half of the current year due to challenging external market environment. General demand from passengers coming to Iceland was lower than anticipated in late summer and fall due to, amongst other factors, the status of the Icelandic tourism industry which was at maximum capacity with hotel and rental cars fully booked. This resulted in more connecting passengers (VIA) than were expected which deliver less unit revenue than direct passengers (to Iceland). Ancillary revenue was also lower than expected due to passengers’ increased demand for carry-on bags rather than checked baggage because of the serious condition of baggage handling at airports in our markets. At the same time, fuel prices remained high. The above had a negative effect on PLAY’s financial results.

PLAY is now seeing positive development as the capacity issues in the Icelandic tourism sector are largely solved and as prepaid COVID-19 vouchers (e.g., airfare, hotels, and rental cars) have decreased significantly. PLAY clearly sees a strong booking trend to Iceland for the winter and next year. The Icelandic Tourist Board anticipates 40% increase in passengers coming to Iceland next year compared to 2022 which will have a positive effect on PLAY’s business. PLAY will soon launch a number of digital solutions and further strengthen its distribution channels that will increase ancillary revenues and improve online service. PLAY also sees strong booking activity from travel agents for passengers visiting Iceland next year.

PLAY’s cost target of being under 4 US cents was achieved during Q3, as unit cost (CASK excl. fuel) was 3.1 US cents, this is due to effective cost control and increased economy of scale in the business.

Top Copyright Photo: PLAY Airlines Airbus A320-251N WL TF-PPB (msn 10134) BWI (Brian McDonough). Image: 957545.

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