Birgir Jonsson, the CEO of the Icelandic budget airline, PLAY has released the following statement following the release of the carrier's 2023 performance:
PLAY carried 1.5 million passengers in the full year of 2023
“2023 was in many ways a very good year for PLAY and once again showed the resilience and flexibility of the business model and our fantastic team of Players. We delivered strong financial results after the all-important summer season and third quarter, delivering the first-ever bottom-line profit even though we were in the middle of a very steep growth curve, having added hundreds of employees, thirteen new destinations, and four new aircraft.
At the end of summer, the year was looking to deliver very acceptable financial results, but, as is sometimes the case in aviation, external factors had a negative impact on the business, and the year closed somewhat below what we had anticipated. This challenging external business environment began to materialize in late summer with various geopolitical and economic variables, such as a spike in oil prices, inflationary pressures on cost, and a crisis in the Middle East. Locally, in the fourth quarter, we saw seismic activity and two volcanic eruptions, resulting in very inaccurate global news coverage that affected demand for Iceland as a tourist destination in the short term. We were also hit with significant disruptions and costs in relation to the industrial action taken by the air traffic controllers in Iceland in the week before Christmas. After all this it is great that we have seen some of our best ever sales weeks since the beginning of the year and looking ahead, we see a stronger booking status and higher unit revenue than last year, giving us every reason to be optimistic for the summer and the year as a whole.
PLAY operated ten aircraft at the end of 2023 compared to six aircraft at the end of 2022.
As we are selling our fourth summer, we see clear signs that our business model is working as it should. Last year, we saw our revenue double and ancillary revenue grow considerably following investment in our digital sales platform. This growth in ancillary revenue will continue as we keep on launching new features and functionalities, such as our new Stopover program launched last month.
Most importantly, we have successfully kept our cost base low and very competitive, allowing us to offer lower fares than our competitors and quickly win market share in our key markets. While most of our competitors are reporting a significant increase in unit costs, we are proud to report a decrease of 6% in our ex-fuel CASK, and the PLAY management team is determined to continue to keep costs under control as this is critical to our continued success.
As a young airline in a steep growth trajectory, we are still operating at a loss after the full year, but as we see our revenues growing and our cost base remaining stable, our losses are rapidly decreasing. This sets a very positive trend towards our future profitability.
Looking into the future, we have identified clear and exciting opportunities for growth, and our team is hard at work to make sure that we find ways to continue to grow successfully. We are also looking at various ways to develop our fleet, as it is critical to find the right aircraft and fleet composition to suit our highly seasonal and ever-changing markets.
2024 will be the first year that PLAY will not add new aircraft to the operation and in a stable environment there would not be a need for additional capital for 2024. Recent events have however shown that the situation of airlines can change quickly, and it is the company’s opinion that the liquidity position needs to be strengthened. Therefore, the company along with its financial advisors has started preparations to uplist its shares from the First North Market to the Nasdaq Main Market in Iceland which is expected to take place in the first half of 2024. We believe that this uplisting will increase the company’s access to capital and broaden the group of shareholders.
Overall, we are proud of our achievements and performance in the year, even though I would have wanted to see less turbulence in the last months of the year and a better financial performance overall. I am, however, absolutely sure that we are on the right trajectory, and I look forward to seeing my great team of colleagues continue to build PLAY into a great airline in the coming year.”
1.5 million passengers and world class on-time performance