Strong Load Factor Growth and PLAY Expands with a New Office in Lithuania
November 4, 2021
- Strong improvement in load factor with 67.7% in October, 30% increase from previous month
- Positive outlook and growing demand
- PLAY carried approx. 68 thousand passengers to date
- PLAY holds a strong financial and cash position with little interest-bearing bank loans
- The financial results for Q3 were under expectations, due to the effect COVID-19 had on revenue, while operational cost was lower than expected
- PLAY will open a new office in Lithuania in December
- PLAY added new destinations in Europe to its schedule and now has 16 destinations for sale, with more being announced soon
During Q3, PLAY focused on a safe and successful operational ramp up of the airline and the company has gained momentum, strength and market share very quickly. Load factor in July was 41.7%, and PLAY carried 9,899 passengers during its first whole month of flight operation. In August, ticket sales increased again after being affected by the rise in COVID-19 cases in Iceland in July. The load factor in August was 46.4% and PLAY carried more than 17,300 passengers. In September, PLAY carried 15,223 passengers and the load factor was 52.1%. The improved load factor reflects recovering demand both to and from Iceland. In October, PLAY carried almost 25,000 passengers and the load factor was 67.7%.
PLAY continued to grow in Q3, and 63 new employees were welcomed on board, 41 cabin crew members, 12 flight crew members, and 10 office employees. PLAY currently has 135 employees.
The financial results for Q3 were under expectations, due to the effect COVID-19 had on revenue, while operational cost was lower than expected. PLAY holds a strong financial and cash position, allowing the company to follow its business plan, build its infrastructure and prepare for operations to North America in 2022. Total equity on September 30 was USD 77.0 million, equaling an equity ratio of 29.2%. Loss amounted to USD 10.8 million for the first nine months of 2021 compared to 1.1 million USD for the same period last year before PLAY started flight operations.
Expansion of PLAY‘s Network
Going forward, the next months will see the expansion of PLAY’s network as new destinations in Europe and North America get added and focus on preparations for the hub-and-spoke operations.
Although vaccination rates in the markets served by PLAY are increasing, the number of new confirmed COVID-19 cases is on the rise. Therefore, the uncertainty associated with the COVID-19 pandemic will remain for the foreseeable future. PLAY is well prepared to weather the uncertainty with flexible operations and a strong liquidity position. The recent rise in number of cases has currently not had a negative impact on sales.
New Office in Vilnius in December
In December, PLAY will open a new office in Vilnius, Lithuania. PLAY's headquarters and current flight operations will remain in Iceland, including all flight and cabin crew. PLAY is taking this step early in its growth stage and the company will expand partially in the new location. The Vilnius office will host various support and technical functions. A local General Manager has already been hired, and a recruitment drive for other roles begins soon. PLAY expects to reach about 15-20 employees in Vilnius within a few months.
Locating some of PLAY's administrative functions in Lithuania will ensure access to a larger talent pool of specialists in IT services, digital development, marketing, finance, and customer service. For example, PLAY's hub-and-spoke model will require a 24/7 service center that does not need to be based only in Iceland as most of the customers are non-Icelandic speakers. The service center for the Icelandic market will continue to be in Iceland. The new office also allows PLAY to develop a more international company culture and create relationships with new suppliers, service providers, and other partners at cost-effective and favorable terms.
PLAY is becoming an international company with operations in continental Europe and North America, as well as Iceland. PLAY is competing with airlines that have low-cost structures and access to specialist skills in the international market. Therefore, it is critical for PLAY to be able to meet the competition at an equal level. A low-cost mindset and a lean company structure are crucial for PLAY to offer low prices in a competitive market. The opening of the Vilnius office is a significant step to securing a low-cost foundation as the company enters the transatlantic market and prepares for future growth.
Webcast, November 5 2021
CEO Birgir Jónsson and CFO Þóra Eggertsdóttir will present the company’s results on Friday, November 5, at 15:30 a.m. The presentation will be streamed via webcast followed by a live Q&A session in Icelandic at https://flyplay.com/investor-relations.
Questions may be asked in writing during the presentation. The presentation materials will be available after the meeting on PLAY’s investor relations website: https://flyplay.com/investor-relations.