CEO Birgir Jónsson among Icelandic airline's execs who worked at now-defunct WOW
New carrier offers cheap flights to Europe via Iceland but can it last?
A new airline connecting Canadians to Europe via Iceland has started flying out of Hamilton International Airport. It offers fares at a significant discount from the major carriers, but will it make it in a market where other carriers have failed?
Junior Sobral was almost one of the thousands of WOW Air passengers left stranded when the Icelandic budget airline abruptly shut down in 2019.
"I was supposed to be flying a week after [that] news emerged," Sobral, an avid traveller who lives in Toronto, told CBC News.
But he said that won't stop him from using another discount airline, Play, which is headquartered in Reykjavík, and got its first flights from Canada off the ground this week, from Hamilton's John C. Munro airport.
Hamilton — the Ontario city is listed as "Toronto" on its booking site — is now the Icelandic airline's fifth route in North America, joining New York, Washington, Boston and Baltimore.
Play offers trips to European destinations, with a stopover in Iceland, for hundreds of dollars less than competitors. Its summer kickoff promotion has one-way flights as low as $169 Cdn.
Customers pay extra for checked baggage, food and seat selection on the Icelandic airline.
"I never had any problems or concerns with [WOW]. I was an avid fan. I was always on their website looking for the best deals," said Sobral. "I just wish [Play] was based in Toronto."
Airline got off the ground in U.S. in 2022
Play's first Hamilton-to-Europe flight departed Thursday evening.
There are flights to 26 destinations in Europe, including London, Paris, Berlin, Copenhagen, Dublin, Brussels and Stockholm, stopping at Keflavik International Airport in Reykjavik on the way.
It began offering flights between Iceland and Europe in 2021 and added U.S. destinations in 2022.
Play's no-frills service means no in-flight magazines or Wi-Fi and entertainment systems, said chief executive officer Birgir Jónsson, one of several Play executives who had worked at WOW Air.
"You basically pay for the services that you need if you want to bring extra baggage, you pay for that," he said at a media event Thursday for the launch in Hamilton. "If you want to eat something on the plane, you have to pay for it."
Play's model is similar to WOW's.
While some travellers may be leery of Play due to its leadership's links to WOW, Jónsson said he has learned from past mistakes.
"Be securely financed, have enough cash, don't grow too fast, [and] securely choose your destinations," he said. "So far, we've been very successful, and this is the year where we will turn an operational profit."
Play plans to run flights daily, year round, knowing it will lose money in the winter months. It believes the consistent schedule will help grow demand for its service and generate more sales in the long run.
"You lose money in the winter and you try to make it up in the summer, for sure," said Jónsson. "That's the harsh reality of aviation."
Discount airlines come in waves
Canada has seen several new players in the discount airline market in recent years, including Swoop, Flair Airlines, Lynx Air and Jetlines.
However, WestJet recently announced plans to shut down Sunwing and Swoop, its low-cost subsidiaries, merging them into its mainline business.
John Gradek, a professor of aviation management at McGill University, said the growth and decline of budget airlines usually comes in waves, driven by high airfares at the mainstream carriers, a phenomenon we are experiencing now.
"Prices have gone through the roof," he told CBC News in an interview in Montreal.
Gradek said Play's strategy appears to be based around prices that are notably cheaper than the larger airlines, but not so cheap that the company can't cover its costs.
"Your strategy will be to steal traffic, not generate traffic… I think this summer's prices are OK for them to maintain profitability on the run."
Gradek expects the prices will be enough of a draw that people would travel a reasonable distance to fly from Hamilton, especially when they weigh in the delays and baggage-handling issues for which Toronto's Pearson International Airport has become notorious.
"Pearson is a tough sell," he said.
Compare all costs, not just airfare
Barry Choi, a personal finance columnist based in Toronto, said factors like cheaper parking at the Hamilton airport, compared to Pearson, may also help sway customers to use Play.
But he said it's unlikely people from beyond driving distance will travel to the Ontario city to take the service to Europe.
He said even folks from Toronto should add up the costs of getting to Hamilton, as well as the extra time required, to determine if the plane ticket savings are worth it. The distance between Toronto and the Hamilton airport, just south of the city, is at least 80 kilometres.
"Sometimes it can be worth it, but sometimes the savings are pretty minimal [so] it may not be worth it at all," he said.
He also encourages getting travel insurance that protects them in case anything goes wrong with the airline, such as in the case of a sudden closure.
"Travel insurance would cover any hotels until you sort your things out. They won't necessarily pay for your flight back home immediately, but at least you're not freaking out as much."
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