Icelandic low-cost carrier Play expects to start turning in positive earnings in the second half of this year, as its transatlantic network matures.

The airline has disclosed a $22.5 million net loss for 2021 – the carrier started services in June last year – on revenues of $16.4 million.

It says revenues were “lower than anticipated”, owing to the impact of the pandemic, but that operating expenditure was “in line with expectations”.

Play’s management team was not forecasting profitability in its first year of operation, and its growth was impeded by the air transport crisis.

“This trend has now been reversed, utilisation is growing and the outlook is positive for this year,” says the carrier, pointing out that “significant pent-up demand” has built up for travel.

Play A320neo-c-Play

Source: Play

Play commenced operations in June 2021

Chief executive Birgir Jonsson says: “We were able to use our flexibility to minimise the negative impact as much as possible and are absolutely on track to realising our vision of building Play into a profitable airline operating a hub-and-spoke transatlantic network.”

Play is cautious over the potential effects of the Ukrainian crisis, notably on fuel, expecting price increases to raise its costs by $10 million this year.

“This cost will be met with an even stronger emphasis on lowering operating costs as well as the introduction of a fuel surcharge,” says the airline.

Fluctuation in the oil price has prompted it to defer a planned fuel-hedging strategy.

But Play says that it has no plans to reinforce its cash position through extra fundraising.

“The company has no interest-bearing debt and the booking flow is strong and growing,” it adds.

“Play will, however, strengthen its efforts to reduce costs across its operation to ensure that the impact of fluctuating oil prices on cash flow and margins will be kept at a minimum.”