Fly Play Reports $5.2m Profit in Q3 2023

Icelandic low-cost carrier Fly Play achieved 110m USD in sales in Q3. EBIT grew tenfold from last year, and the airline reports a net profit of 5.2m USD in the third quarter of this year.

Fly Play hf Q3 Highlights

PLAY Airlines made a profit of USD 5.2 million in Q3 2023, compared to a net loss of USD 2.9 million in Q3 2022.
Total revenue in Q3 2023 increased by 84% compared to Q3 2022, reaching USD 110.2 million.
Earnings before interest and taxes (EBIT) in Q3 2023 increased almost tenfold, from USD 1.3 million in Q3 2022 to USD 12.9 million.
Ancillary revenue grew by 150% year-to-date in 2023, and ancillary yields per passenger increased by 35% year on year.
In July, PLAY broke its record for the number of passengers carried in one month, with 191,577 thousand passengers and a load factor of 91.1%.
PLAY operated flights to 33 destinations in Q3, achieving an on-time performance of 85.1% and a load factor of 88.4%.
RASK (Revenue per available seat kilometer) increased by 9% year-on-year, reaching 6.1 US cents in Q3 2023.
Ex-Fuel CASK was 3.4 US cents, and total CASK decreased by 2% year-on-year, reaching 5.3 US cents in Q3 2023.
The company had USD 39.2 million in cash at the end of Q3, including restricted cash, and no external interest-bearing debt.
Forward RASK is tracking ahead of last year, and forward booking status is strong despite a 79% capacity increase in Q1 2024.

Comments from PLAY CEO

Birgir Jónsson, CEO said of the result:

“We are all very proud of our financial and operational results for the third quarter and especially of the fact that PLAY generated a net profit of 5.2 million USD, the first-ever quarterly net profit since our inaugural flight in June 2021. Operational profit grew tenfold from the same quarter last year, revenues were up 84%, and passenger numbers increased by 74%, quite remarkable facts and a testament to a well-performing business model and a great team of professionals.
“PLAY has been on a very steep growth trajectory as we have been increasing our fleet size, expanding our network, and welcoming many new Players to our team. Growth is expensive, and it is, therefore, a notable achievement that we have been able to increase our unit revenues and grow our ancillary revenues at the same time, resulting in a strong net profit and a healthy cash position. We do not plan to grow as much next year but will focus on optimizing and stabilizing our operation and increasing our profitability before we commence our next growth phase in 2025, which will see more aircraft, some of whom have already been secured, and a more extensive and denser network. We continue to have a laser focus on our cost base, and our team has been successful in maintaining a very competitive unit cost, something that is absolutely critical for our success but nonetheless a real challenge in today’s inflationary business environment. I sincerely want to thank all the exceptional individuals who make up the PLAY team for their fantastic work, and I am absolutely convinced that nothing can stand in their way in the future as they continue to play to win!”

PLAY Q3 Operating Statistics

Operating statistics		Q3 2023	Q3 2022	Change
Number of flights	no.	3,222	1,994	1,228
Number of operating destinations	no.	33	22	11
Number of aircraft in operation	no.	10	6	4
Percentage of arrivals on time (OTP)	%	85%	85%	0.1 ppt
Number of passengers	000s	540	311	74%
Available seat kilometers (ASK)	mill	1,821	1,067	71%
Revenue passenger kilometers (RPK)	mill	1,611	913	76%
Stage length (km)	no.	2,941	2,918	1%
Load factor	%	88%	85%	3 ppt
Seats available	000s	619	367	69%

Income statement
Operating revenue	USD mill	110.2	59.9	50.3
Operating expenses	USD mill	82.1	49.3	32.8
EBIT	USD mill	12.9	1.3	11.5
EBIT margin	%	12%	2%	10 ppt
Net operating results	USD mill	5.2	-2.9	8.1

Balance sheet
Total assets	USD mill	493.8	327.6	166.3
Total liabilities	USD mill	468.4	287.9	180.4
Total shareholders equity	USD mill	25.5	39.6	-14.2
Equity ratio	%	5.2%	12.1%	–
Cash and cash equivalents (incl. restricted)	USD mill	39.2	29.6	9.6

Share information
Share price at period-end	Per share	8.8	16.3	–
Earnings per share	US cents	0.80	-0.50	–

Key statistics
Airfare per passenger	USD	144	150	-4%
Ancillary per passenger	USD	58	43	34%
Yield per passenger	USD	201	193	4%
TRASK	US cents	6.1	5.6	9%
CASK (incl. Fuel & emissions)	US cents	5.3	5.5	-2%
CASK (excl. Fuel & emissions)	US cents	3.4	3.1	11%
CO₂ per RPK (grams CO₂ per RPK)	no.	56.9	62.3	-9%
CO₂ emissions in tons from jet fuel	no.	91,578	56,960	61%
*Higher revenues and higher load factor despite significant increase in capacity*

PLAY Q3 Operational Performance

In the third quarter of 2023, PLAY Airlines expanded its flights to 33 destinations in Europe and North America. Compared to the same period in 2022, the airline increased its capacity by 71%, allowing more passengers to travel. The average occupancy on flights also improved from 85% to 88.4%. In Q3 2023, PLAY flew 540 thousand passengers, a 74% increase from the previous year.

Despite the significant increase in capacity, revenue grew even more, up by 84%. This shows that PLAY’s strategy is working well in key markets. Unit revenue (revenue per available seat kilometer) also increased by 9%, indicating the airline’s ability to generate more revenue per passenger.

During Q3 2023, 24% of passengers flew from Iceland, 33% flew to Iceland, and 43% were connecting passengers. The number of connecting passengers increased by 4% compared to the previous year. Flights to and from North America had a high occupancy rate of 92%. The number of passengers traveling to and from North America increased by 88%, while the number of passengers traveling within Europe increased by 66%.

The increase in connecting passengers is due to better connectivity within PLAY’s network, growing awareness of the airline in foreign markets, and strong demand from U.S. consumers. In February, PLAY introduced bundled fares, contributing to higher yields from connecting passengers than the previous year.

PLAY maintained a strong operational performance, with 85.1% of flights arriving on time in Q3 2023, surpassing its competitors.

PLAY Q3 2023 financial results

In the third quarter of 2023, PLAY experienced its most successful financial period to date. They added 4 aircraft and 13 new destinations, leading to impressive results.

During this quarter, PLAY achieved a net profit of $5.2 million, a significant improvement compared to the $2.9 million net loss during the same period last year. Revenues for Q3 2023 reached $110.2 million, compared to $59.9 million in Q3 2022. Their total revenue per available seat kilometer (TRASK) increased by 9% in Q2 2023 and amounted to 6.1 US cents. Furthermore, EBIT reached $12.9 million, a substantial increase from $1.3 million in the previous year.

PLAY has focused on boosting ancillary revenue by introducing new products like bundled fares. In Q3 2023, their ancillary yield per passenger rose by 35% to $58, compared to $43 in Q3 2022. Overall, PLAY’s ancillary revenue has increased by 150% compared to the same time last year.

The company’s operating expenses, including depreciation, totaled $82.1 million for the quarter. As a result, the unit cost per available seat kilometer (CASK) decreased by 2% to 5.3 US cents compared to the same period in the previous year. Excluding fuel costs, the Ex-Fuel CASK increased by 11% due to inflation and one-off maintenance expenses. PLAY predicts that the Ex-Fuel CASK for the entire year will be around 3.7 US cents.

During the quarter, the financial income and expenses were negative, with $6 million in total, including $4.6 million in interest expenses on lease liabilities.

As of the end of the period, PLAY’s total assets amounted to $493.8 million, a significant increase from $331.5 million at the end of 2022. The company operated ten aircraft throughout the period. Trade and other receivables were $27.9 million, primarily from unpaid ticket sales. Deferred income decreased to $40.7 million in September, compared to $82.4 million in June, which is expected due to seasonal factors. The company’s cash position at the end of the period was $39.2 million, including restricted cash. Total equity at the end of the period was $25.5 million, and the company has no external debt with interest.

Recognition and new ancillary products

PLAY, the renowned airline, has achieved yet another remarkable milestone! The crew of PLAY has been voted as the number one cabin crew by the readers of USA Today’s 10Best. Despite being a relatively young airline, PLAY has swiftly gained popularity since its inauguration in 2021 and the commencement of its North American flights in 2022.

To enhance the passenger experience, PLAY has introduced a convenient digital onboard self-service system. Passengers can now simply use their own personal devices to order food and beverages directly from their seats. This innovative solution not only provides a seamless experience but also offers dynamic pricing and a wide range of product options. Early trials have shown increased sales on PLAY flights, making the customer journey even more enjoyable.

Furthermore, PLAY has introduced exclusive Space seats on select flights. These seats, located at the front of the aircraft, offer passengers extra legroom and either an aisle or window view. The middle seat is cleverly blocked with a comfortable side table, providing a sense of privacy and comfort. During low season, this configuration reduces the capacity to 200 seats per Airbus A321neo aircraft instead of 214 seats, which helps in optimizing labor costs. Moreover, the Space seats contribute to increased ancillary revenue and can be easily removed when seasonal demand requires a higher capacity.

PLAY Outlook

According to the latest update, PLAY’s forecast for the entire year remains the same as the information provided in September. They expect to serve approximately 1.5 million passengers in 2023. The projected revenue for the airline is around USD 280 million, while the estimated EBIT is expected to be negative, around USD 10 million.