Icelandic budget carrier Play aims to strengthen its equity through a move onto Iceland’s main stock market as it seeks to build a financial buffer and fuel future growth after a tough end to 2023 as travel demand to Iceland dipped amid concerns around increased seismic activity.

Play has hired financial advisors for the planned IKr3-4 billion ($22-29 million) share capital increase, as it looks to transfer from Iceland’s First North Growth Market onto the Nasdaq Main Market.

Play A320neo-c-Play

Speaking on a full-year results presentation today, Play Airlines chief executive Birgir Jonsson said: “We think we are now in a stability in our business and [are of a] size that we can move to the main market and want to use that opportunity strengthen the equity base and cash position, and basically prepare the company for the next phase of growth.”

Play, which launched operations in the summer of 2021, hopes to finalise these plans in time for its AGM in late March.

“We want to grow,” says Jonsson. ”We want to strengthen the company. It is very clear – and the last few months have shown us –  that external factors are something we need to take into account and we basically need a buffer for those fluctuations and some fuel to finance our growth.”

While Play managed to more than halve full-year EBIT losses to $20.7 million in 2023 on a doubling of full-year revenues to $282 million, the performance was heavily impacted by sharply reduced travel demand in the fourth quarter amid concerns of disruption resulting from heightened volcanic activity in Iceland.

”It’s no secret this [performance] is under our expectations,” says Jonsson. ”Having said that we are still seeing this trend, which we are very proud of – and gives us a lot of encouragement into the future – where we see our operational loss decreasing as the airline gets into scale.”

The airline had posted its first ever quarterly profit in the third quarter, but increased fuel costs had already prompted it to rein in hopes of a first full-year surplus even before travel disruption fears hit. 

”In the fourth quarter we saw some very challenging external factors come into play,” Jonsson says. ”It was negatively impacted by seismic activity – or I should say very inaccurate news coverage of the seismic activity in Iceland in November and December. This was a big factor in our business.”  

Both Play and Icelandair have been critical of the impact of global media coverage of the volcanic activity in the country.

Play says this impact on demand, compounded by air traffic control disruption “at the worst possible time” in the run-up to the Christmas holidays, was central to the airline losing $17.6 million at an EBIT level in the fourth quarter – a similar size loss as the same stage in 2022.


Alongside the disruption to demand felt in fourth quarter, it continues to have an impact going into 2024.

”When you lose a few weeks in bookings, you see it a few weeks later. It becomes like a chain reaction. And this is the problem we are dealing with and probably most of the Iceland tourism industry,” says Jonsson. ”We are increasing capacity but not able to increase our fares and utilise our revenue strategy as much as we would have wanted.

“However, when we get closer to spring and quarter two this is beginning to change quite dramatically,” he says. Play expects revenue per ASK growth of 11% in the second quarter versus the same period in 2023, on capacity increased 21%.

“When you look at the summer, when capacity is not increasing as much, we see a dramatic increase in the RASK (42%),” he says.

”We will continue to see an improvement in our operating performance,” Jonsson adds. ”We forecast EBIT will be around zero in 2024 and to be positive in 2025, significantly positive.”

Play ended the year with a fleet of 10 Airbus A320neo-family jets, and had been looking potentially at growing its fleet to 14 aircraft by 2025. It has though cancelled letters of intent for two more A320neos due to enter the fleet in 2025, saying “a different aircraft profile is more suitable” for its next growth steps.

“We will operate 10 aircraft this year and as I have sometimes said this is the year we will optimise the business and stabilise the business after this massive growth we’ve been in and prepare ourselves for the next stage of growth,” Jonsson says. ”We will add capacity in 2025.” Play says it will grow to 12 aircraft in 2025.

Further ahead Play is targeting a fleet of between 18-20 aircraft by 2029, generating revenues of $750 million and an EBIT margin of at least 10%. 

“That is the future we are heading into and the reason we want to reinforce our coffers in the coming weeks and months,” says Jonsson. ”This is a strategic thing. There’s no urgent situation. We just want to have buffer and fuel future aircraft acquisitions.”