PLAY made a profit of $12 million during the summer of 2023. This is the first time the Icelandic airline has reported an after-tax operating profit at the end of the summer season. This result demonstrates PLAY’s profitability over the summer and the success of its business model.
Turnover almost doubled
Revenue for the summer months of 2023 almost doubled compared to the same period in 2022. It increased from $63 million in 2022 to $116 million in summer 2023. Although seat capacity increased by 70%, the company managed to increase unit revenue per seat kilometer (RSKO) during the summer, which demonstrates the strength of the acquired company in its main markets in a short period of time. PLAY recorded an 89% occupancy rate during the summer of 2023, which is higher than competing companies.
A more than adequate punctuality rate
PLAY transported 537,000 passengers this summer and posted an punctuality rate of 83.9%, testifying to the success of operations while the company’s activity strengthened considerably during the period. The company welcomed four new aircraft to its fleet to add 13 new seasonal destinations.
Third quarter profits
The third-quarter earnings estimate shows that operating profit will be around $10 million, compared to $1.3 million in the third quarter of 2022. The turnaround is around $8.7 million . This estimate is based on the management accounts for the first two months of the third quarter and the forecast for September results. As a result, PLAY expects to make a profit of approximately $4 million during the third quarter.
PLAY estimates cash on hand will be approximately $39 million at the end of the third quarter. The airline’s financial position is therefore strong and it does not require additional funds for its operations. PLAY expects that the cash balance at the end of the year will be approximately $28 million, and that the cash flow from its operations will therefore break even, after taking into account the investments made for the expansion of its fleet.
$34 million recovery
PLAY expects to carry around 1.5 million passengers in 2023 and the operating loss for the year will be around $10 million. In this regard, it is worth noting that the company recorded an operating loss of $44 million in 2022, resulting in a turnaround of approximately $34 million. Furthermore, PLAY is looking at revenue of around $280 million this year. CASK excluding fuel is estimated at $3.7 cents for the full year 2023.
Outlook for 2024
PLAY plans to carry approximately 1.8 million passengers in 2024. Estimated revenue will be approximately $340 million. As such, the company expects to record an operating profit in 2024. It is estimated that CASK excluding fuel will see an increase equivalent to inflation, which includes a 1% increase in costs in 2024 due to changes recently announced in the pilots’ collective agreements.