Play Plans to Expand Fast
The new Icelandic airline Play plans to expand its fleet of aircraft considerably, come this spring, Morgunblaðið reports, quoting an investor report.
The airline’s representatives are currently looking for Icelandic investors to invest EUR 12 million in Play, which would give them a 50 percent stake in the company. The other 50 percent would be owned by the founders, Morgunblaðið reports.
Obtaining these funds is a prerequisite for the British investment fund Athene Capital to provide the airline with a loan in the amount of EUR 40 million. Athene Capital will have the option of buying a 10 percent stake in the airline. Should the airline expand faster than planned, Athene Capital may contribute another EUR 40 million.
Operation is set to begin with two aircraft, Airbus A320 and A321, by the end of this year, with flights scheduled to European destinations. The airline does not plan to take any jumbo jets into use and to use instead solely Airbus A320 and A321 aircraft in its operation – all of them to be leased.
In May, the fleet will be expanded to six aircraft, and to eight by May 2021. One aircraft will be added to the fleet in April of 2022, and one more the following year, bringing the total number of aircraft to ten in May of 2022.
Compared to WOW Air, which went bankrupt in March, Play’s expansion appears fast. During its first year in business, 2012-2013, WOW operated two aircraft, and added one in 2013. During its third year in business, the airline operated a total of four aircraft.
Cost of training crews is expected to be limited for the new airline. A three-day in-house course is expected to suffice to get crews ready for the first flight. Labor costs are expected to be 27-37 percent lower than at WOW Air. The utilization of crews will be high, or 800-900 hours a year, compared with 550 hours at Icelandair.
The airline expects to require a 75 percent occupancy rate to cover operating costs, whereas the comparable figure for WOW was 85 percent.