In 2021, we saw the launch of PLAY Airlines, an ultra low cost carrier in Iceland that intended to use Reykjavik (KEF) to connect points in North America with points in Europe, just as Icelandair does.
Continue reading: Iceland’s PLAY Airlines Adjusts Business Model
Share your questions, experiences, and thoughts below.
Both Norse and Play are dead men walking.
It’s usually a sign that the end is near, when these kind of Airlines moves away from their core business model.
By starting obscure routes, sometimes disconnected from their main hub or beginning to wet lease their aircraft out instead of their own flying
True, see also - for example - Air Belgium:
Yay, scheduled services to China and Hong Kong. Oh noes, now for some flights to the Caribbean. Oh no, let's try wet leases. Oh no, almost bankrupt!
Now Baltia on the other hand has been around for decades already 🙂
That’s actually not the definition of insanity at all. Doing the same thing multiple times very often yields different results. As anyone who has rolled a pair of dice can tell you
And Breeze. They haven't changed their business model per se, but rather incorporated rapid shifts into the model itself. They change where they fly so fast, you get whiplash trying to keep up. Hard to believe that will work out for them.
Only in a world with perfect odds. If the die (economics) are loaded, you’ll often get the same result over and over.
Although I agree probabilistic outcomes can always allow for a different result, I think the die have been rolled enough in this arena to know they are pretty loaded
Altering your business plan to adjust for how the market is going is a necessary and positive thing to do. However, you also have to think about the moves you make before you make them. In this case, Iceland is a good stopover spot if your traveling trans Atlantic. OTOH, it's a horrible O&D market, as it is so small. I don't see these guys making a living out of point to point from KEF to/from Southern Europe. The market is too small and Icelandair is in it already. Try again, Play.
99.9999% of dice in the world are non-loaded dice so that's a really weird point to stake out
Oh I just saw your further comment and see you're making a more general point. Sorry
Why does it keep happening? Less than intelligent people that think an airline can sell fares for less than it's operating costs and make money. Airlines that do not have lucrative premium travel of cobranded streams of revenue, particularly credit cards.
I think the other problem with these carriers is they think they can treat customers terribly right off the bat like they're Ryanair, not realising you need to at least wait until you have foothold to do that. People try them, have an appalling experience, and never fly them with again, ensuring they tell everyone they know to not to either. Also the savings are pithy once you add things you generally need flying long-haul, and uncompetitive compared to legacy carriers who with deals are often not much more or cheaper bundled.
“Insanity is doing the same thing over and over again and expecting different results”
It's not the same thing because this time it's someone else that gets to get rich off this idea
If i recall correctly - the founders of WOW air seemed to blame bringing in A330's for the collapse of the company way back when. I think they (naively) were claiming that if they had just stuck to the 320 series, the company would not have run into issues.
"I am confident that these adjustments to our business model will allow us to grow." oh the irony. They're confident that offloading half their fleet will GROW the airline?
Ted. Song. WOW. Swoop. Zip. Joon. Play.
The unstated rule is: give your LCC airline a hilariously stupid name and it will 100% fail by the time you get home this afternoon..
A very limited amount of people in the catchment area is indeed a bit of an issue. It means limited growth possibilities. Strange how it takes several attempts with startup airlines to find this out...
As long as one is not in a hurry and can plan in an Iceland stopover at no added costs, there's really little incentive these days to fly across the pond via Iceland, as choice is plenty and fares are low. It just adds an extra stop and with the Icelandic weather and volcanic activity, that means an avoidable extra risk factor. However, Iceland (and even Reykjavik) is an amazing place to spend some time, so that's really recommended if one has the opportunity. But I think the Iceland stopover market really is becoming more and more of a niche market, especially now that also narrowbodies can do TATL without an issue: that's a bigger game changer than most seem to realize.
On a related note: Norse has now returned its 787-8s, and gone in the wet lease and charter business and is apparently leasing one or two aircraft to Neos for flights to and from Italy. However, given how the share value plummeted to penny stock, the cash flies out of the window and the new half-baked strategy takes ages to implement, it seems that most investors are expecting a round of share emissions soon. Either that, or selling off the airline to some company that looks into expanding its long haul fleet in a quick way. We'll see.
IMHO the major problem with PLAY's strategy was that Iceland Air uses essentially the same approach as a connecting hub and has both better service and offers more options in the way of layovers plus connecting more city pairs. Iceland Air seems to be doing well and is expanding so it isn't necessarily the model that is broken but the fact there is a well established incumbent and there simply isn't enough business for 2 airlines. I expect this news is a positive for Iceland Air and, sadly, I can likely not get the $1000 round trip Saga Premium fares from the US to Europe (with a free layover in Iceland going both ways) that I've used in the past.