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First Half 2021 for PLAY, More Robust than Expected

·4 min read

First Half 2021 for PLAY, More Robust than Expected

  • Operation begins in a secure and efficient manner

  • Cash position stronger than planned

  • Leasing six new aircraft - a major milestone in securing future fleet at terms better than anticipated in business plan

  • Positive demand trends and outlook

  • PLAY carried more than 17,300 passengers in August, which almost doubled the number of passengers carried in July

  • Focus is now on preparing for the hub-and-spoke operation in spring 2022 and adding destinations in North America and Europe

The second quarter for PLAY set the scene for a strong buildup with organizational capacity, technological infrastructure, and the necessary licenses. In April, PLAY raised USD 47.0 million through private placement and in June, three aircraft commenced scheduled flights under favorable power-by-the-hour lease terms.

After receiving the Air Operator Certificate and launching ticket sales, there was strong demand making PLAY’s first summer schedule a success.

PLAY further solidified its funding in June, raising USD 34.9 million through an Initial Public Offering and is now listed on the Nasdaq First North Growth Market Iceland.

The financials for first half reflect PLAY’S successful start of operations. The cash position is more robust than estimated as terms on credit card settlements are more favorable than anticipated. These improved terms reflect the solid financial position of the company and a successful start of operations.

Positive Demand Trends Support Buildup

PLAY’s first full operational month in July was a success achieving the main objective of safe and reliable operations with a strong focus on passenger satisfaction.

However, frequent changes to governmental travel restrictions and new COVID-19 cases negatively influenced demand and utilization in the short term.

A rise in COVID-19 cases in Iceland in mid-July subdued a positive trend in demand from Iceland. A number of customers took advantage of PLAY´s flexible terms and rescheduled their travel dates. For PLAY, this meant a transfer of income and load in time, without loss of revenue. For its first month of flight operation PLAY carried 9,899 passengers and the load factor was 41.7%.

August showed a promising trend as ticket sales increased and the outbound market recovered. Load factor in August was 46.4%, and PLAY carried more than 17,300 passengers, almost double the number of passengers carried in July. These numbers reflect increased demand from Icelandic customers following the decrease of new COVID-19 cases in the country. The load factor is expected to rise in September for the second consecutive month.

Fleet Expansion to Ten Aircraft at Lower Prices Than Expected

Another significant milestone was that PLAY signed two Letters of Intent (LOI’s) with two major international aircraft lessors in August.

These arrangements increase PLAY’s fleet size from three to nine aircraft in spring 2023 and PLAY is in final negotiations to lease the tenth aircraft. Lease terms are better than anticipated in PLAY’s business plan.

The first LOI is for two new A320neo aircraft, manufactured in 2020. The aircraft will be delivered in the first quarter 2022.

The second LOI is for three A320neo and one A321neo 2023 aircraft, which will come into operation in spring 2023. All four aircraft will be delivered new directly from Airbus to PLAY through the lessor.

With these arrangements, PLAY is taking advantage of favorable terms in the current market and will have six aircraft in its fleet in spring 2022 in time for the hub-and-spoke operation between North America and Europe.

Negotiations for additions to the fleet for 2024 and 2025 are ongoing, bringing the total fleet to 15 aircraft by 2025.

Hub-and-Spoke Operation a Major Step from Point-to-Point Operation

The first half report clearly illustrates that PLAY is on track to launch operation to North America in 2022, and the priority for the coming months is preparation for this significant step.

PLAY is currently employing 131 people and the expansion will require further hiring of around 150-200 people.

Webcast, September 1 2021

CEO Birgir Jónsson and CFO Þóra Eggertsdóttir will present the company’s results on Wednesday, September 1, at 8:30 a.m. The presentation will be streamed via webcast followed by a live Q&A session in Icelandic at https://flyplay.com/investor-relations. Questions may be asked in writing during the presentation.

The presentation materials will be available after the meeting on PLAY’s investor relations website: https://flyplay.com/investor-relations.