PLAY airlines turned a US$12 million profit over the summer months of 2023. This is the first time the company has reported profit from operations after tax at the end of the summer season. The airline said that the news shows that PLAY is a profitable company for the summer and that its business model is working well.
The $12 million profit for the summer months of 2023, June to August, compared to a $3 million loss in the same period last year.
Year on year PLAY’s summer revenue has nearly doubled from $63 million in 2022 to $116 million in the summer of 2023. Despite a 70% increase in seat capacity, the company managed to increase unit revenue per seat kilometre (RASK) over the summer.
PLAY had an 89% load factor in the summer of 2023. During the summer, PLAY transported 537,000 passengers and had a punctuality rate of 83.9%. The company took in four new aircraft and added 13 destinations during the summer.
PLAY management estimates that the third quarter result shows that operating profit will be approximately $10 million compared to $1.3 million in the third quarter of 2022. The estimate is based on an account for the first two months of the third quarter and a forecast for September results showing that PLAY expects to turn a profit of $4 million in the third quarter.
PLAY estimates cash will be approximately $39 million by the end of the third quarter. The airline says that its financial position is strong and as such it will not need additional funds for its operations. PLAY estimates that cash balance at year-end will be around $28 million, and cash flow from the company´s operations is therefore neutral, after taking into account investments in the expansion of the company's fleet.
PLAY expects to carry around 1.5 million passengers in 2023 and that its operating loss for the year will be around $10 million. The company posted an operating loss of $44 million in 2022. PLAY expects revenue of approximately $280 million for the full year. The cost per seat kilometer excluding fuel (CASK Ex Fuel) is estimated at around US$3.7 cents for the full fiscal year 2023.
PLAY plans to carry around 1.8 million passengers in 2024, with an estimated revenue of around $340 million. The company forecasts that it will post an operating profit in 2024. CASK Ex Fuel is estimated to increase in line with inflation, which includes a 1% increase in cost in 2024 due to recently announced changes to Pilot’s Collective Bargaining Agreements.
PLAY has secured two additional aircrafts for the year 2025, which will expand its fleet to 12 A320neo. The airline stated that it was evaluating a further seat capacity increase.
“As we draw nearer to the end of the peak season, we are very proud of PLAY’s performance over the summer months and optimistic for the future,” said Birgir Jonsson, CEO of PLAY. “We see solid financial results with revenue in the summer months nearly doubling from last year and the airline delivering a net profit of $12 million in the same period. That is a turnaround, from net loss to net profit, of around $15 million from last year.”
“We foresee that we will again almost double our revenue in the third quarter and that our operational margin (EBIT) will be nearly ten times higher than last year, as well as PLAY delivering a quarterly net profit for the first time. The fact that we have managed to keep our costs low while increasing our unit revenue (RASK) and nearly doubling our capacity is a true testament of how well-established we are becoming in our key markets and gives us great confidence for the future,” he added.
With a “solid” cash position and, when adjusted for investments in fleet expansion, the airline has reached a neutral cash flow, PLAY’s Jonsson confirmed that the airline does not intend to raise new equity in the current market environment. “After a period of steep growth, we have now reached the required scale to run an efficient and profitable operation and can begin to focus on optimising our operation,” he said.