Icelandic budget minnow Play expects to be making an operating profit by the end of the year despite reporting increased first quarter losses.
The airline projects flying up to 1.7 million passengers in 2023, generating revenue of $280-320 million.
Net loss for the three months to March was $17.2 million against $11.2 million in the same period last year.
This came as revenues tripled from $9.6 million to $32.7 million as more than 212,000 passengers were flown to 18 destinations in Europe and North America in the traditional weaker winter period. But total operating expenses totalled $50.4 million.
The number of passengers flown in the first quarter increased four-fold year-on-year with the load factor up from 63.5% to 78.4% driven by a rebound in air travel demand and improved connectivity within the network.
The carrier said: “March saw a significant year-on-year increase in the number of passengers traveling to Iceland, highlighting Play’s commitment to expanding its market share of tourists coming to Iceland.”
An estimated 9% of all passengers travelling to Iceland flew with Play, compared to 4% in the first three months of 2022, reflecting increased awareness of the airline internationally.
“At the same time, forward bookings from foreign travel agencies have improved significantly this year compared to the same time in 2022. Again, this indicates that the awareness of and trust in Play in foreign markets has grown,” the airline added.
Play operated a fleet of eight aircraft by the end of March with a ninth added in April and a tenth due into service ahead of the summer peak as it gears up to serve 37 destinations.
Winter 2023-24 will see afternoon departures to Stansted and Copenhagen to provide better city break options and more flexibility to passengers.
The introduction of three bundled fare choices in February resulted in a 25% rise in average ancillary revenue per passenger in forward bookings.
Chief executive Birgir Johnson said: “The first quarter of the year is always challenging in the aviation business with low demand and yields and relatively high costs due to various preparations for the all-important summer season.
“We see very positive signs for the year as our booking flow is very strong, costs are under control and major external factors such as oil prices have been developing positively.
“A clear sign of this is the fact that we can report a positive cash flow after the first quarter, which is an important achievement for a young airline in a ramp-up phase.
“We are also providing insights into the year ahead and how we see the next quarters developing, ending in a positive operating profit for the full year.
“Of course, our business environment is very fluid and subject to many fast-moving external variables, but for now, we see very positive signs for the future.”
He added: “Our booking status is significantly stronger than at the same time last year, reflecting the continued positive momentum of our business. Furthermore, we are excited to continue expanding our network, with 37 destinations planned for 2023, including 13 new ones.”