Iceland's PLAY cancels five routes; shifts focus amid financial challenges

These changes are part of a strategic shift announced by PLAY on October 16, 2024. The airline aims to concentrate on direct services between Iceland and Europe while reducing capacity for transatlantic connections due to disappointing yields from its hub-and-spoke model across the Atlantic.

“The point-to-point part of PLAY’s schedule, primarily flights between Iceland and Southern Europe, has been popular and profitable from the beginning," stated the airline. However, they noted that "the airline’s yields on its hub-and-spoke part of the business across the Atlantic has been disappointing."

PLAY plans to shift focus towards Southern European destinations by mid-2025 due to significant changes in the North American market that have affected financial performance negatively. The carrier is also applying for an air operator’s certificate in Malta to expand operations beyond Iceland.

As part of this strategy change, PLAY entered into a wet lease partnership with GlobalX Airlines for operations between November 1 and March 15. One of their A321neo aircraft has been operating out of Miami under this agreement.

“This process is expected to be completed by spring 2025," said PLAY regarding their plans under the new Maltese AOC.

In financial news related to these developments, PLAY reported Q3 2024 results showing earnings before interest and taxes at $9.6 million with a net profit of $3.5 million—$1.2 million less than Q3 2023. Despite challenges with declining unit revenues driven by increased capacity growth in North America leading to more seats available year-on-year (YoY), costs per available seat kilometer improved mainly due to lower fuel prices.