A new Icelandic airline plans to launch flights to the US next spring - here's why the CEO thinks now is the right time

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A new Icelandic airline plans to launch flights to the US next spring - here's why the CEO thinks now is the right time
© PLAY PLAY A321 PLAY

  • Icelandic startup PLAY has received initial permission from the DOT to operate nonstop flights to the US.
  • PLAY CEO Birgir Jónsson explained investor expectations in the long-term plan have pushed it to enter the US market.
  • The airline plans to target New York, Boston, and Washington DC with a single-class, no-frills product.

Iceland startup PLAY has gotten initial approval from the US Department of Transportation to operate flights to the US, and it hopes to welcome leisure travelers onboard flights to and from the East Coast next April.

In August, new Icelandic low-cost carrier PLAY sent an application to the DOT requesting permission to fly to the US starting next summer, though PLAY CEO Birgir Jónsson told Insider it’s aiming for spring. The request, which the DOT initially approved on Tuesday, included the freedom to operate regularly scheduled commercial and charter service between Iceland and the US using single cabin Airbus A321 aircraft.

Although the application did not specify which routes it intends to fly, Jónsson told Insider it would be targeting daily flights to New York, Boston, and Washington DC, though nothing can be confirmed until the airline has acquired the slots at each airport.

PLAY was incorporated shortly after its predecessor, WOW Air, ceased operations in 2019. WOW regularly flew between Iceland and the US using Airbus A330 and A320 series aircraft, and PLAY plans to do the same, though with a different approach.

WOW was successful in the market we are moving into, serving the East Coast and working in a 24-hour loop, meaning they got the aircraft out of Iceland in the afternoon and back in the following morning, which utilized the aircraft very well. However, the problem is they expanded too quickly and invested in wide-body jets to fly to the West Coast. Instead, PLAY will focus only on the 24-hour loop to the East Coast, essentially replicating the good things about WOW and avoiding its mistakes,” explained Jónsson.

PLAY’s onboard product to the US is still under discussion, but will likely be zero frills in a single-class configuration, meaning no inflight meals, wifi, or entertainment, and add-ons, like luggage, will be at a charge, says Jónsson.

“At the moment, we are focusing on the lowest price and a comfortable, clean, and secure way of transport, but it’s not an experience,” Jónsson told Insider.

Jónsson explained customers are looking for the lowest price, so they will win the market by having the lowest fare compared to competitors.

PLAY’s reasoning for entering the US market now after only two months of service is due to investor expectations and the fact that the airline has gotten good deals on aircraft. According to Jónsson, the airline secured $90 million for its long-term business goal, which involves operating a hub-and-spoke model between the US, Iceland, and beyond. This financial strength has allowed the airline to secure a low price point for aircraft 10 to 12 years in the future, explained Jónsson.

Furthermore, PLAY has also secured a unique aircraft payment plan, known as “pay by the hour,” meaning the company only pays for aircraft when it uses them, according to Jónsson. PLAY takes advantage of the setup by not flying on Wednesdays, so it pays nothing for its aircraft on that day. This has put the airline in a good financial position, allowing it to focus on long-term goals, like serving the US.

PLAY’s ambitious move to the US comes soon after its June 24 launch. The airline has been steadily improving its load factor and on-time performance, having filled 52.1% of available seats in September and having 96.2% of flights arrive on time, according to the carrier. Jónsson hopes to continue its success as PLAY moves into the US and expands in Europe.

Read the original article on Business Insider

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