Things don’t appear to be going all that well for Iceland-based Play Airlines, the heir to the WOW Air legacy. With results coming in worse than expected, the airline is shifting its plans away from the west and further toward the east. Or really, the south. Oh nevermind, let me explain.
WOW was started in 2012 as a lower cost version of Icelandair, hoping to use the same strategy of connecting North America and Europe via Iceland. Instead of 757s with multiple classes of service and meals, WOW picked up Airbus narrowbodies, painted them purple, and unbundled fares in a traditional ULCC model.
The idea may have seemed good in theory, but it was a spectacular failure when the airline overextended, bought widebodies, started flying to places like India and Los Angeles, and then disappeared. It died in 2019, not even making it long enough to blame the pandemic for its demise.
Almost immediately, a restart was in the works. This time, the plan was to take some A321neos, paint them red, and then launch the new Play Airlines to do basically the same thing as WOW when it started.
In a sense, this was kind of like the Norwegian Air Shuttle story. Norwegian grew in all kinds of ridiculous ways over the years. The whole thing imploded and the new Norwegian re-emerged doing the only profitable part of the business: short-haul flying between Scandinavia and the rest of Europe. Play was also trying to zero in on the best part of its predecessor’s business when it launched in 2021.
The problem, apparently, was that the core part of the airline — connecting North America to Europe via Iceland — was not actually a profitable plan. Here’s how the airline set itself up over time:
Play Departure Share by Region
Data via Cirium
I see five distinct segments for the airline. The British Isles has the steadiest amount of capacity year-round. During the winter when other markets fell off, the British Isles surged to more than 20 percent of total departures. During the summer when other markets grew, the share sagged toward 10 percent.
Scandinavia was good for another 15 percent of capacity, give or take, while bigger European cities added 20 percent. Those had more seasonal variation.
The other 45 to 55 percent (depending upon the season) was split between European leisure markets and the US/Canada. Those European leisure markets were primarily beach destinations along the Mediterranean, the usual Italy, Greece, Spain, etc. The US and Canada though, well, that was weirder.
For summer 2022, Play went into Baltimore in April with 1x daily, Boston in May with 1x daily, and New York/Stewart in June with 1x daily. Stewart shrunk to 2x weekly in winter.
By summer 2023, all three were still flying but two more cities were added. In April, Play inexplicably went into Washington/Dulles 1x daily followed by 1x daily to Hamilton (Ontario) in June.
Icelandair had been at Dulles, but it went back into Baltimore as well once Play announced it would fly there. Why Play decided to serve both, I have no idea. Of course, Icelandair was also in Boston, but Stewart was not even worth the fight since the airline already flew to both JFK and Newark where actual passenger demand existed. And while Icelandair was in Toronto, it was fine letting Play try to pick up scraps at nearby Hamilton.
All of these markets continued to fly in summer 2024 at 1x daily, but this winter the cuts have come earlier and gone deeper.
Baltimore, Boston, and Stewart all drop to 5x weekly this month, staying there at least through Feb. Hamilton goes to 4x weekly. Meanwhile, this last week, Play suspended Dulles from early Dec through Feb. I expect more cuts will be coming.
Why do I say that? Well, Play said so. But Play is trying to roll into its changes and not make them very disruptive to existing bookings. Here is how the airline describes it.
PLAY has decided to significantly cut back its capacity on its North Atlantic routes. This adjustment is already underway and will continue into 2025. The number of PLAY’s destinations in North America and Northern Europe will decrease by mid-year 2025, with a bigger emphasis being placed on the airline’s leisure markets in Southern Europe.
Now the only real question is whether ANY destinations remain in North America or whether it’s exited completely. Keep an eye on that summer schedule.
This focus on Southern Europe leisure means Play is no longer going to try to tap into the heavy demand from travelers looking to come to Iceland. Instead, it will focus on trying to scrap together warm-weather flying for as many of Iceland’s less than 400,000 people as it can. To my surprise, that’s a relatively untapped market.
Of course, there is Icelandair in the mix with its own flights but it doesn’t serve those sun destinations much. This winter it will have 1x daily split between two airports in the Canaries plus 4x weekly to Rome, 3x weekly to Barcelona, 2x weekly to Lisbon, and 1x weekly to both Alicante and Verona. That’s not much. Even in summer, the only additional sun destination is Nice.
There is very little service in these markets on other airlines too. Wizz focuses on its eastern European ethnic traffic, except for a couple weekly to Rome. Vueling had a summer seasonal Barcelona run that appears to be gone, though Iberia still does summer seasonal Madrid (which isn’t really a sun destination). Neos has a couple of weekly trips to places like the Canaries and Verona, but it’s pretty minimal.
The others are focused on bringing people into Iceland, like easyJet, Jet2, TUI, etc. They all fly from European cities to Iceland, not from warm weather vacation destinations. Ryanair isn’t in the market at all.
Meanwhile, the market size and average fares from Iceland down toward the Mediterranean have continued to grow.
Daily Passenger and Fare Data from Iceland to the Mediterranean
ARC/BSP data via Cirium
I can’t believe it, but it seems there might be a nice little niche for Play in this world. It’s never going to be huge with this strategy so now it just needs to resist overextending. Early signs are troubling… after all, the airline has decided to open a new operating airline based in Malta.
It looks Play has a wet-leasing deal with GlobalX where it will operate an airplane during the winter. And by basing the airplane in Malta it can probably find more favorable operating costs. But it also says it is looking to base a Maltese airplane in Tenerife next summer to operate to Iceland but also “other destinations.” In the end, the airline wants to have 6-7 airplanes on the Icelandic certificate and 3-4 on the Maltese one. It’s getting dangerously close to stepping outside the boundaries it should have.
For now, let’s see if Play can refocus on Southern Europe profitably and avoid doing anything dumb.
27 comments on “Play Airlines Plans to Play in the Sand Instead of the States”
Interesting analysis.
I had no idea that an airline had actually connected Iceland to India (KEF to DEL?) in the past. That was definitely the airline route bingo that I didn’t realize I needed this morning, and naturally I had to run to the Great Circle Mapper to chart things out for that route…
MEX is a similar distance from KEF to DEL, and MEX-KEF-DEL is only 2.6% longer than the GC path for MEX-DEL (MEX-KEF-BLR is even less, at 1.4% longer with the stop vs direct). In other words, if anyone needs to burn a few hundred million but considers flinging the bills into an Icelandic volano with a nearly unpronounceable name to be far too much trouble, setting up an airline to transport pax from southern Mexico or Central America to India by way of Iceland would definitely be a fun alternative option.
WOW, I still can’t believe any airline wanted to recreate the business model of its processor, even if just to PLAY around.
The Wow Air strategy relied on copying a full service competitor, then undercutting them to crack a profit. Sound familiar?
The more successful low cost carriers have some sort of niche, an edge which their rivals don’t have. Think Ryanair using airports no one has ever heard or WN (in the past) using their schedule to dominate the Texas market.
The flaw with this Play Airlines plan is that it seems incredibly easy to replicate. Scaling up fast to hinder competition isn’t a terrible idea.
I don’t think this strategy is that easy to replicate. Airlines have an operational advantage if they have a base at at least one end of a route – it makes scheduling much easier if you can do a bunch of out-and-back flights from your base.
Most of the leisure destinations that Play is flying to aren’t big enough to be a base for any airline, so if another airline wants to compete, then they’ll need more complicated routing. That’s obviously doable, but makes it less of an obvious win for the potential competitor.
Icelandair obviously has the same advantages, but might rationally choose not to get in a fare war with their only local competitor.
There is also a first-mover advantage with these things. If there is only enough demand for 1 flight/day (or less), then entering a market with existing service is just going to result in low load factors until you can force the other airline to say “uncle” and leave the market. That’s not an appealing game to play if you have other places you could grow incremental revenue.
Ugh autocorrect kinda sapped the life out of that attempt at humor. Sorry! Take two with further edits to follow. What I wouldn’t give for an edit button!
WOW, I still can’t believe any airline wanted to recreate that business model, even if just to PLAY around.
Since Play Airlines wants to have a plane based in Malta, I think they should name it to “The Maltese Falcon.”
I can’t believe the spill-on-spill-on-spill model didn’t work again for the third (second?) time.
Can we talk about WN wanting to connect to Iceland (and. Presumably Europe) via BWI. This just sounds terrible to me.
Whyyyyyyyyyyy?
More long haul, low yield flights with tremendous competition? I’d think Elliott would not want anything to do with that.
No, no, no. Southwest is simply partnering with Icelandair to feed people through BWI. There’s nothing wrong with that.
And Elliott would not get involved in any of this kind of decision making.
Sometimes I think that just considering Stewart for trans-Atlantic flights should automatically lead to the government denying them permission to fly to the US. There isn’t enough local traffic and and it just doesn’t work as an alternate airport to NYC, it’s too far away and there’s no rail service. I know Senator “I don’t know as much about airlines as I think I do” Schumer wants to connect it to the Port Jervis line, but there are dozens, if not hundreds, of rail projects in the US that would give more benefit for the buck.
I really wish everyone would accept that without spending vast sums on high-speed rail (with, again, better projects elsewhere), Stewart is just going to be a small airport serving the local market. It can support Allegiant and possibly some LTD Breeze service, and that’s pretty much it, except for maybe one major airline connecting it to a hub, but even that’s been tried.
Pretty much the same applies to Hamilton. Baltimore has more potential, but Icelandair also flies to Reykjavík from BWI.
My thoughts exactly: “Stop trying to make ‘New York/Stewart’ happen. It’s not going to happen.”
I’ve left similar comments on other threads, but the high-level problem is that SWF isn’t geographically within the New York City catchment area, and it doesn’t have a large enough catchment area of its own.
If you look at a satellite map, the problem jumps out immediately – most of the area between Manhattan and SWF is very green. In particular, the Hudson Highlands are a big natural barrier, with almost 0 development due to the protected land and geographical constraints. The various routes from Manhattan to SWF pass through ~20 miles of mountainous parkland with ~0 potential customers along the route.
This natural barrier is actually reflected in commuting patterns as well. The Census defines Metropolitan Statistical Areas (MSAs) using commuting data, and determined that “Poughkeepsie-Newburgh-Middletown” is a separate MSA from “New York-Newark-Jersey City”. There are very few people traveling over the Hudson Highlands on a day-to-day basis.
In practical terms, this means that service at SWF is mostly going to succeed or fail based on local traffic to and from its own MSA. Unfortunately, that MSA just isn’t very large. The 2022 population estimate from ACS was ~703,000 people. This just isn’t large enough to support routine international service.
Any airline that wants to serve New York should almost certainly start at EWR. Yes, it’s capacity-constrained, but airlines have routinely been able to enter the market with service at off-peak times. An off-peak flight at EWR is much more likely to succeed than an ideal time at SWF.
If ISP ever completes its proposed “Midway Crossing” project to move the terminal building next to the LIRR station, then it could become an interesting “low-cost” alternative airport for NYC, similar to STN or LTN. Even then, I think the 7,000 ft main runway is too short for transatlantic service with a full load, so the main function would be to relieve some domestic demand from JFK.
Good points about ISP, although I think expanding the immigration/customs facility to handle international commercial traffic would set off a NIMBY response. JetBlue could try it with an A220, but they’d probably need some sort of Mint offering to attract the well-heeled east island crowd, and the last thing they need right now is another subfleet.
The Midway Crossing project includes a brand new terminal. I would be shocked if that doesn’t include an FIS facility to handle immigration and customs. Even if flights to Europe aren’t on the radar, flights to the Caribbean and Cancun probably are.
I don’t think the NIMBY risk for the FIS facility in particular is that high – it’s more going to be about the project as a whole.
> The 2022 population estimate from ACS was ~703,000 people.
Hey, that’s close to 2X the population of Iceland, so if PLAY can fly them to southern Europe, surely someone can make a business out of flying these New Yorkers to somewhere abroad ;)
(of course, we don’t actually know if the new PLAY business model will work either)
“I know Senator “I don’t know as much about airlines as I think I do” Schumer wants to connect it to the Port Jervis line, but there are dozens, if not hundreds, of rail projects in the US that would give more benefit for the buck.”
Yeah, but they aren’t all in NY. Follow the money.
Is there a future for LCCs operating TATL? Wow, Play, Norwegian, and Norse all seem to have had a fair bit of trouble.
Basic economy on network carriers undercut their value prop and took just enough passengers to make them non-viable.
Two points here:
1) The Icelandic market is tiny, so there’s only so much potential in sending Icelandic people (or whatever they’re called) to the Med and/or the Canaries. Yes, you can make some cash on certain routes – but there’s a pretty low ceiling.
2) The connecting flights between NA and Europe via KEF is not a bad idea and there is merit to doing it in certain places. Are BOS, BWI, IAD and SWF those places? I’d say no. The thing is, the first three have nonstop service to other European cities, so why do this? SWF is tiny and will never get bigger. As a comment above stated: it will never serve the greater New York area – only part of the Hudson Valley. They should look at cities that are in the northeast, have no Europe service, but can fill a narrowbody with people who are willing to connect to different European locations via KEF. Perhaps mid-sized or suburban markets that are too small to land even Aer Lingus? PVD, MHT, ROC, RIC or ORF. Maybe even ISP.
There is a nice niche here, I can feel it. PLAY simply hasn’t been imaginative enough yet.
I’m not sure that it would work, but the idea of flying to smaller airports in the Northeast on narrowbodies from KEF is an interesting concept and could potentially be worth a shot, especially if done less than daily, and with higher density seating arrangements for tourists.
To your list, I’d add PWM (Portland, ME), or even go really crazy and add PSM (Portsmouth, NH), splitting the difference & distance between MHT and PWM. Even Plattsburgh, NY (or other airports near the Canadian border) could be fun to think about. There might also be some opportunities for flights to cities in the Canadian maritime provinces, thought it looks like Icelandair already serves many of those likely cities.
In the end, perhaps KEF is meant to be more of a hub for just a single airline; it may be a situation where two airlines competing there would be too much.
The problem with serving connecting traffic is that you’re competing directly with one-stop itineraries on AA, DL, and UA. Given the choice between connecting in KEF vs. connecting in an a US hub (EWR, IAD, JFK, PHL, etc.), the typical American vacationer probably *prefers* the US hub, because it’s familiar and has more flight options.
In theory, Play could offer some 1-stop destinations that aren’t served directly from US hubs, e.g. Palma de Mallorca. But the reality is that secondary city-to-secondary city travel just doesn’t have that much demand. Most people traveling to Europe from PVD, ROC, RIC, and ORF want to go to London, Paris, Rome, etc. If there is enough demand, the first nonstop flight will be to one of those (probably London).
Play (and Icelandair) really only have an advantage for travelers who specifically want to go to Iceland, possibly as a stop on a longer itinerary. Trying to build a TATL scissor hub just isn’t very viable when you have hubs on both sides supported by massive O&D traffic.
While your points are certainly valid, I would absolute choose a connection at KEF over options like PHL, EWR or JFK. And, it would be somewhat less painful to be able to fly from a smaller northeastern city to places like EDI or CPH with a somewhat painless connection in Iceland. And remember that Play (and Icelandair for that matter) are more budget friendly than the likes of the big 3 US carriers.
It just seems to me that there is potential for a good niche here – it’s somewhat limited (in terms of the number of airlines and US destinations that could pull it off) but I do see some brilliance in it. Imagine PVD or MHT to Palma de Mallorca with only 1 stop? You can do that it you offer a hub with dozens of European connections that are well timed.
The mistake that the likes of WOW air did was that they went too big and too far. ORD, LAX -> Europe via Iceland? Why? There’s so much competition. If you charge a high enough fare to break even on a 787, no one will fly you. But being able to use 737s or A320 series a/c makes a huge difference.
I see where you’re coming from, and acknowledge that personal preference is a big factor in things like this, but I’m going to respectfully disagree with your first paragraph.
For person based in the US who has to do a 1-stop international trip, I would generally prefer (and recommend as a avgeek to non-avgeek relatives) that that stop to be in the US (even if that means EWR/JFK/PHL, etc). That’s because if anything goes wrong it means the pax is stuck in the US (with many more options for other flights or home, or even renting a car in the worst), not overseas. For those living in the eastern 1/3 of the US, doing a 1-stop international trip with a stop in the US also allows for more (potential) contguous sleeping time (as it combines short & long flights, as opposed to 2 medium-length flights if one connects in KEF), though those with difficulty sleeping on planes may prefer otherwise.
For a real-life example of how this plays out, family recently returned from a trip to the eastern Med. Their initial flight (Italy to CLT) arrived close to on time, but their flight from CLT to TPA was cancelled, and they were lucking to get standby seats on a later flight to TPA that arrived just a few hours before the airport was shut down due to Milton. The fact that AA runs more than a couple of flights a day between CLT and TPA really saved them. If they had had a connection in Europe with the 2nd flight initially cancelled, there’s less of a chance that the family would have made it home before the airports in FL shut down, and they could have spent a stressful few days trying to get home or waiting out the storm (with the home unprepared) in an expected place.
I think KEF gets more competitive & interesting as a stop when there are a few/any other decent 1-stop intineraries available.
As much as I like the idea (more so having the option) of a connection in KEF, especially for potential flights from smaller origin points in the US, I wonder about the commercial potential. If an airline were to try to do that, I’d hope that they would try to increase the size of the market by offering packaged tours in the secondary European destinations, guarantees that pax would make their Mediterranean cruise departures in time, etc (anything to cause more people from smaller airports in the US to want to fly to secondary European destinations, though that would be pretty easy to replicate.
Perhaps an interesting statistic would be to see where the “ultimate destination” (not simply the first connecting point) of US-originating pax (preferably limited to just leisure pax) on trans-Atlantic flights really is. My guess is that a handful of destinations (London, Paris, Rome, etc) account for the bulk of tourism from the US to Europe.
” PVD, MHT, ROC, RIC or ORF. Maybe even ISP.”
If you’re going to pick a western NY city then BUF is the best choice. Larger population than ROC, and already attracts a significant number of Canadian flyers.
There are a few airline models which are probably not long for this world….PLAY/NORSE/GLOBAL are 3.
WOW were fun but useless: they came to Delhi on their inaugural flight with a bunch of cabin crew waving little flags
of the Republic…..the Republic of Ireland, that is, not India. (Colours are similar, alphabetically close, what could possibly
go wrong with the intern ordering them on Amazon…)
If only someone took this model and applied it to Anchorage! They could buy very old planes, and only get two of them to run! And offer weekly service from ONT to LAS…..
Ah, who am I fooling, that is too good of an idea.
To your point, KEF (like ANC) arguably makes much more sense as a cargo hub than as a pax hub.
While much of the cargo never leaves the plane it came in on, ANC is one of the busiest cargo airports in the world, simply because adding a 3 or 6 hour connecting or technical/refueling stop is an easier sell for cargo than it is for people. The challenge (aside from fuel prices; not sure how fuel prices at KEF compare to those in US/Europe, relative to the fuel prices in ANC vs US/Asia) is that the distances for tATL are much shorter than for tPAC, so adding a stop in KEF to save fuel or add range is a tougher value proposition.