Icelandic Startup PLAY Has Raised $40 Million To Start Operations
A group consisting of some of Iceland’s largest investment companies and two pension funds is providing Icelandic startup…
A group consisting of some of Iceland’s largest investment companies and two pension funds is providing Icelandic startup airline PLAY with five billion Icelandic Króna ($40 million). The carrier is hoping to raise another $20 million by this summer. It is still unclear when operations are intended to commence. PLAY says that tickets will be available ‘soon’.
New Chief Executive
The low-cost carrier hoping to take over the transatlantic budget space left by WOW Air in 2019 also has a new CEO, Fréttabladid reports. The new name on the post, Birgir Jónsson, is no stranger to logistics or air operators. He is the former Chief Executive of the Icelandic postal service Íslandspóstur, as well as the previous CEO of Iceland Express and Deputy Chief Executive of aforementioned WOW Air. He replaces his old colleague Arnar Mar Magnusson, also formerly of WOW, in the capacity of Vice President of Operations.
The fourth-largest pension fund in the country, Birta, is investing one-fifth of the $40 million raised by PLAY. Birta is also a shareholder of flag-carrier Icelandair with 1.3% but decided not to take part in the airline’s share offering last year. Other than Birta, the group putting up the money for PLAY consists of investment company Stoðir, holding company Langasjós, the company Fiskisund, and another pension fund called Lífsverk.
Learning from WOW’s mistakes
With so many transfers from WOW, only in operation for five years, one could be forgiven for worrying about the safety of people’s pensions. However, the experience from the failed budget carrier is precisely what will make PLAY a success, its management says.
“Mistakes were made within Wow Air which cost them, but the company did very well for a time. We have been looking a lot at its setup in 2015 and 2016 when the fleet and the operation was simple,” Arnar Magnusson said in an interview last summer reported by Bloomberg.
Fleet of A320s to both sides of the Atlantic
In terms of fleet, Mr Magnusson is quite probably referring to WOW’s decision to lease three Airbus A330s in 2016, a move that drove costs up significantly. PLAY will steer clear of widebodies, opting instead solely for the A320 family of jets.
The plan is to operate new or nearly new aircraft to destinations in Europe such as London, Paris, Berlin, Copenhagen, Alicante and Tenerife to begin with. As the fleet grows, the airline intends to add routes to the US East Coast, to cities like New York and Boston.
Simple Flying has reached out to PLAY for more details on immediate plans and comment on the funding news but was yet to receive a response at the time of publication.
Are you excited at the prospect of a new Icelandic low-cost airline? Let us know in the comments.