Tuesday, 7 September 2021

First half to 2021 played well for PLAY - better than expected results.

Remarkably the brand new low-cost airline operating flights between Iceland and Europe, PLAY has had a good start to the year.  This new budget offering carried more than 17,300 passengers in August, which almost doubled the number of passengers carried in July.

Also in August PLAY applied for a permit and exemption authority with the US Department of Transportation to launch services to the United States in 2022. The carrier put in the application on 20th August asking to operate both scheduled and charter flights in and out of the U.S. on its A321 aircraft.

In April, PLAY raised USD 47.0 million through private placement and in June, three aircraft commenced scheduled flights under favourable power-by-the-hour lease terms.

Operation begins in a secure and efficient manner 
Cash position stronger than planned
Leasing six new aircraft - a major milestone in securing future fleet at terms better than anticipated in business plan
Positive demand trends and outlook
Focus is now on preparing for the hub-and-spoke operation in spring 2022 and adding destinations in North America and Europe

After receiving the Air Operator Certificate and launching ticket sales, there was strong demand making PLAY’s first summer schedule a success.

PLAY further solidified its funding in June, raising USD 34.9 million through an Initial Public Offering and is now listed on the Nasdaq First North Growth Market Iceland.

The financials for first half reflect PLAY’S successful start of operations. The cash position is more robust than estimated as terms on credit card settlements are more favourable than anticipated. These improved terms reflect the solid financial position of the company and a successful start of operations.  

Positive Demand Trends Support Buildup

PLAY’s first full operational month in July was a success achieving the main objective of safe and reliable operations with a strong focus on passenger satisfaction.

However, frequent changes to governmental travel restrictions and new COVID-19 cases negatively influenced demand and utilization in the short term.

A rise in COVID-19 cases in Iceland in mid-July subdued a positive trend in demand from Iceland. A number of customers took advantage of PLAY´s flexible terms and rescheduled their travel dates. For PLAY, this meant a transfer of income and load in time, without loss of revenue. For its first month of flight operation PLAY carried 9,899 passengers and the load factor was 41.7%.

August showed a promising trend as ticket sales increased and the outbound market recovered. Load factor in August was 46.4%, and PLAY carried more than 17,300 passengers, almost double the number of passengers carried in July. These numbers reflect increased demand from Icelandic customers following the decrease of new COVID-19 cases in the country. The load factor is expected to rise in September for the second consecutive month.

Fleet Expansion to Ten Aircraft at Lower Prices Than Expected  

Another significant milestone was that PLAY signed two Letters of Intent (LOI’s) with two major international aircraft lessors in August.

These arrangements increase PLAY’s fleet size from three to nine aircraft in spring 2023 and PLAY is in final negotiations to lease the tenth aircraft. Lease terms are better than anticipated in PLAY’s business plan.

The first LOI is for two new A320neo aircraft, manufactured in 2020. The aircraft will be delivered in the first quarter 2022.

The second LOI is for three A320neo and one A321neo 2023 aircraft, which will come into operation in spring 2023. All four aircraft will be delivered new directly from Airbus to PLAY through the lessor.

With these arrangements, PLAY is taking advantage of favourable terms in the current market and will have six aircraft in its fleet in spring 2022 in time for the hub-and-spoke operation between North America and Europe.

Negotiations for additions to the fleet for 2024 and 2025 are ongoing, bringing the total fleet to 15 aircraft by 2025.

Hub-and-Spoke Operation a Major Step from Point-to-Point Operation

The first half report clearly illustrates that PLAY is on track to launch operations to North America in 2022, and the priority for the coming months is preparation for this significant step.

PLAY is currently employing 131 people and the expansion will require further hiring of around 150-200 people.

Plastic Pollution 

Did you know that 79% of all plastic used ends up either in the ocean or landfills, while the other 12% is burnt in incinerators, and only 9% gets recycled? It’s true that plastic plays an important role in our daily lives. Nonetheless, we can do a lot to reduce the amount of plastic we use.

In 15 simple ways, you can contribute to reducing plastic pollution. Easy things, such as: 

Drink tap water. 

Encourage manufacturers to use PCR materials. 

Actively participate in recycling.

Support organizations dealing with plastic pollution.  

Participate in beach or river cleanups.

See all 15 tips and help reduce plastic pollution here

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