Interview: PLAY CEO On Building Hub-And-Spoke Network With New US Route
PLAY is launching a third US route during the summer season as CEO Birgir Jónsson seeks to advance the Icelandic startup's connecting strategy between Europe and North America.
The airline, which is building a hub-and-spoke network out of Reykjavik Keflavik (KEF), has so far focused on adding European destinations since launching last July. However, the LCC confirmed in December plans to begin service to Boston (BOS) and Baltimore/Washington (BWI) and now Jónsson has unveiled another US point.
Flights to New York Stewart International (SWF) are slated to start on June 9, with the airline becoming the first new international carrier at the airport since 2019.
New York Stewart is located 97 km (60 mi.) north of Manhattan, serving the Greater New York metropolitan area that covers New York City, the Hudson Valley, New Jersey and Connecticut. LCCs including Allegiant Air and Frontier Airlines are present there, while Norwegian Air Shuttle offered transatlantic service between 2017 and 2019.
In addition, Scandinavian low-cost startup Norse Atlantic Airways intends to serve SWF once it begins commercial operations later this year, helping to fill a void left by the exit of Norwegian.
Jónsson told Routes that the Reykjavik-New York Stewart route is part of a drive to connect markets in North America and Europe that have strong demand, mixed in with flying point-to-point routes to some European vacation destinations.
“We’re looking up and down the US east coast and into Canada to find airports and open some creative city pairs,” he said. “If you look at New York and London, the capacity and competition is huge and so we have to find something else that is slightly outside of the major cities.
“Instead, we’re looking at places like Gothenburg in Sweden, as well as some cities in Norway—basically destinations where you would have to connect anyway.”
PLAY is currently serving nine destinations in Europe but plans to fly to 21 during the upcoming summer 2022 season, in addition to the three US points. New routes from Reykjavik include Brussels (BRU), Dublin (DUB) and Madrid (MAD).
Jónsson admits that PLAY’s strategy is nothing new, echoing that of Icelandair and the defunct Icelandic LCC Wow Air where he spent a year as deputy CEO. However, he believes the startup can win market share and create a profitable business.
“There was no need to reinvent the wheel,” Jónsson said. “We know where the demand is coming from, and we are serving that demand at a lower cost. We are basically going into existing markets making sure we can win them on price.”
During PLAY’s first six months of operation, the airline flew 101,053 passengers on more than 1,000 flights. About 48% of its passengers originated in Iceland, which the carrier said highlights the “significant need” for a low-cost alternative in the market. The country has been without a home-based LCC since Wow ceased operations in March 2019.
Although a number of PLAY’s senior management team were previously employed by Wow—and there is significant overlap in terms of the carriers’ route networks—Jónsson is confident that the airline will avoid some of the pitfalls that contributed to Wow’s demise.
He points out that Wow was underfunded in relation to its size and overcomplicated its operations by adding A330s and flying longer routes to the likes of Los Angeles and Delhi.
“We are going to keep it simple and focus on what works,” Jónsson said. “Our network will remain relatively small and flexible—we won’t be distracted by the bright lights of the big city.”
PLAY, which is listed on Iceland’s Nasdaq stock exchange, has a fleet of three Airbus A321neos and three more are due to be delivered before spring. The airline hopes to have a mix of 15 A320neos and A321neos by 2025.
Operations to New York Stewart will start on June 9, with the route set to be served once a day. Flights will depart from Reykjavik at 3.15 p.m., arriving in the US at 5.35 p.m. The return service leaves SWF at 6.45 p.m. and arrives back in Iceland’s capital at 4.40 a.m. the following day.
Rick Cotton, executive director of the Port of New York and New Jersey, said: “The addition of PLAY’s international service is important in realizing our post-pandemic vision for New York Stewart as a leading regional provider of both international and domestic air service and as a generator of strong economic growth.”