In the early years of the Iceland tourist boom, air traffic was dominated by Icelandair, the national flag carrier. WOW Air was founded in 2011 as a low-cost carrier flying passengers to and from Europe, Asia and the United States. WOW experienced explosive growth, going from 400,000 passengers in 2013 to 1.6 million three years later.
Unsustainable Low, Low Fares
Unfortunately, WOW’s low fares turned out to be unsustainable, and the airline abruptly ceased operations on March 28, 2019. Thousands of travelers were left stranded and told to book flights home on other airlines. The collapse of WOW had a dramatic effect on the Icelandic tourist industry and on the country’s economy: visitors dropped 16% overall and 20% from the United States. Given that fishing and tourism are the main sources of revenue, the impact was serious.
A New Airline Is Born
Last July two former WOW executives announced the formation of a new low-cost airline called PLAY. Former WOW Vice President of Operations Arnar Mar Magnusson will be the CEO. The new airline attracted investment from Avianta Capital, an Irish fund owned by the daughter of the Ryanair founder, which plunked $40 million into the new venture. PLAY will fly leased Airbus 321s configured with 200 seats—two to start, six by summer 2020 and ten by 2022. The airline will initially serve six European destinations: Alicante, Tenerife, London, Paris, Copenhagen and Berlin, with plans to inaugurate North American service in the spring. In the meantime, WOW is being reconstituted as a cargo airline.
We Are Back, No…PLAY
Initially called WAB (short for “We Are Back”), the name PLAY was chosen to express the company’s freewheeling spirit. Planes will be painted bright red, and the philosophy is “the sky is our playground.” Even so, they’re careful to state that “safety comes first, with our core principles being on-time performance, simplicity, happiness and low prices.”
The carrier plans to start by giving away 1,000 tickets, and prospective winners can register on the website, which is now live (flyplay.com). Tickets were initially supposed to go on sale in November, but that has been pushed back.
Taking a New Approach
What makes the founders of PLAY believe they can succeed as a low-cost airline when WOW failed? For one thing, they appear to have a more sober and sensible approach to growth. Rather than overextending themselves as WOW did, their plan is to achieve market penetration gradually, slowly expanding their fleet and destinations.
The other explanation is simpler: The country’s aviation industry has always operated on a low-cost model. Icelandair is now an established carrier, but decades ago they had a reputation as being the “hippie airline.” In the 1970s and early 1980s, they were the cheapest way to get to Europe. My first flight on Icelandair took 11 hours of flying time on a prop plane, with a stop in Reykjavik. We landed in Luxembourg, where free transport was available to take the backpackers out of the country (the locals knew full well that their visitors weren’t going to spend any money there).
No specific plans have yet been announced regarding schedules or prices. However, industry insiders expect flights to begin shortly, since PLAY intends to have North American service in place for the summer 2020 transatlantic season. To get some traction in the market, they’ll need to launch with aggressive fares. Right at this moment, you can book a roundtrip flight on Delta from New York JFK to Reykjavik in August for $372 (Icelandair comes in at $412 on the same route). Icelandair charges $452 from Philadelphia and as little as $482 from Washington Dulles.
PLAY will also need to project an aura of stability to win back consumers who were burned by the sudden bankruptcy of WOW, but that already seems baked into their business plan. Despite that, the only thing that’s certain is that PLAY will be an adventure.
Source: frugal travel guy