New Icelandic carrier makes a play in low-cost transatlantic market

Startup low-fare Icelandic airline Play announced new transatlantic service out of a third U.S. airport, Stewart International in New Windsor, New York, to begin June 9. (Stewart lies about 65 miles north of New York City.)

Play, which launched last July with nonstops from Reykjavik, Iceland, to London’s Stansted Airport, is the latest low-fare airline to attempt to make heavily discounted service across the Atlantic work.

Play’s immediate Icelandic forebear, Wow Air, went bankrupt in 2019 after starting long-haul services to the U.S. West Coast and India. Denmark’s Primera Air faced a similar fate in 2018. Low-cost Norway-based competitor Norwegian, meanwhile, abandoned long-haul intercontinental operations in January 2021 in order to focus on European and Middle Eastern routes.

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Now, Play will debut flights from the U.S. to Reykjavik — and onward from there to 22 other European cities — on April 20 with flights from Baltimore/Washington International Airport, followed by Boston Logan starting May 11 using narrow-body Airbus A320neo and A321neo planes. The carrier is promoting the new connecting services to Europe with fares as low as $109 one-way. CNBC.com associate editor Kenneth Kiesnoski spoke with Play CEO Birgir Jonsson — formerly with Wow Air himself — on what it’s like to start an airline amid a pandemic and how Play plans to succeed where others have failed.

(Editor’s note: This interview has been condensed and edited for clarity.)

Kenneth Kiesnoski: Sustaining a low-fare service across the Atlantic has proven tricky, as the failures of airlines like Iceland’s own Wow Air show. How will Play succeed where others have stumbled?

Birgir Jonsson: Play and Wow are actually closely related, so to speak. Many on our key management team are ex-Wow employees, as are a lot of our flight crew. I myself was Wow’s CEO for a period.

So we know that story quite well. And, in fact, Wow was a great company and was doing really well operating the business model that we are [now] operating. It was only when Wow started operating wide-bodied jets like Airbus 330s and flying to the [U.S.] West Coast and basically doing the long-haul [and] low-cost thing — which is a hill that many good soldiers have fallen on many times.

KK: Not only Wow but Primera Air and even Norwegian, which has ceased flying long-haul routes.

BJ: Right. But [Play was] was founded with, or managed to raise, around $90 million and proceeded to execute a business model of creating a hub-and-spoke system connecting the U.S. to Europe with a stop in Iceland [mixed] with point-to-point traffic to and from Iceland. We launched the…