Icelandic airline PLAY is firmly following in the footsteps of its predecessor WOW. Much of its network looks similar, and its inaugural US destinations are precisely the same. So does that mean it’s on the same rapid growth, rapid demise trajectory of its purple uncle?

Not necessarily, because, unlike WOW, PLAY’s leadership team has no lofty ambitions of building up a monster fleet. For PLAY, 15 is the magic number, and that’s where its fleet will stay.

How big will PLAY get?

It might only be a three-plane airline right now, but by the height of summer 2022, that fleet will double in size. There will be more following along too, but exactly how big is PLAY going to get?

The target fleet size for this startup airline is no big secret. Indeed, when PLAY entered the Nasdaq First North Growth Market last summer (celebrating by ringing an onboard bell at 12,000 feet above Iceland), it could only do so with a transparent and detailed business plan in hand. That business plan dictates for a modest fleet of just 15 aircraft.

CEO Birgir Jonsson outlined the delivery plans for this fleet, stating:

“We started with three aircraft last year. In 2022, we'll have six. We'll go up to 10 in spring 2023, then 12. And the peak of the current plan is 15 aircraft in 2025.”

PLAY, Launch, Expansion
Three will become six by summer. Photo: PLAY

The first three aircraft arriving with PLAY were not factory fresh. They weren’t old either, having only operated for a brief time with beleaguered Mexican airline Interjet. Between them, they average under four years of age, and all are on less than 4,000 cycles. But the next planes that are coming will be box fresh.

Tipped to be next to arrive is TF-PPA, a 1.8-year-old A320neo. Delivered to the lessor in July 2020, it’s been in storage since. The next follows a similar pattern. Currently registered as F-WWBF, this next A320neo is parked in Toulouse, having failed to be taken up by its customer.

The original customer? SaudiGulf Airlines, Saudi Arabia’s third carrier. Having been flying since only 2016, it hasn’t flown at all since the start of the pandemic. This re-customering of aircraft, two out of its order of 10, suggests it won't be coming back again.

Airbus, Deliveries, Cancellations
SaudiGulf did not take the aircraft up. Photo: Airbus

Big fleets lose agility

As noted by Mr Jonsson, the airline’s present and approved business plan calls for reaching a peak of 15 aircraft in 2025. Given that rate of growth, can we expect to see this expansion continue beyond 2025? The answer is ‘potentially’, but not without a lot of thought on the matter.

“I really think, at that point in time, we should stop and consider our options really closely. Because if we go over that [15 aircraft] I'm really scared that we will lose our flexibility. We won’t be as able to dance with the demand and the seasonal fluctuations in this model.”

The PLAY CEO has noted in the past how important flexibility is going to be for this airline. Being able to reposition capacity to where demand is needed, being able to scale up and down between the 320 and the 321, and being laser focussed on optimal utilization is what makes the model work. Being overburdened with capacity opens the door to a multitude of influences that could upset that carefully crafted balance.

WOW Air A330
There is a lot to learn about expanding too fast from predecessor WOW. Photo: ERIC SALARD via Wikimedia

Birgir is not pulling the 15 airplane fleet goal out of thin air either. Having been deputy CEO at WOW Air, he saw how unwieldy a big fleet can become, and how much pressure it can put on the airline. He told us back last summer:

“The pressure of being too big was basically what killed them in the end.”

That’s not to say Mr Jonsson would never consider a 16th aircraft, or even a 20th. But it has to make sense to be contemplated, and that will only be decided with a lot of number crunching in the offices in Reykjavik. And if the model works best at 15 planes, then a 15 plane fleet it will be. Jonsson summarized,

“It is not our intention and objective to be the biggest airline in the world. Or to have 100 aircraft, or to create some kind of global connection hub in Iceland or something. We just want to be a really flexible operator in this model, and be profitable, of course.”