Play, the Low-Cost Icelandic Airline, Shuts Down Amid Financial Struggles
The Icelandic low-cost airline Play has announced its abrupt shutdown, canceling all flights and affecting the travel plans of approximately 120,000 passengers. The company expressed its regret for the disruption caused to travelers and thanked them for their understanding during this challenging time. The shutdown has left around 500 employees without jobs and marks a significant event in the aviation industry, following the failures of previous Icelandic airlines like Primera Air and Wow Air.
Background of Play Airlines
Founded in 2019 by former Wow Air executives, Play began its operations in June 2021 with a business model similar to its predecessor. The airline primarily focused on “point to point” services from Keflavik International Airport, connecting Iceland with various locations in Europe and the United States. Up until its closure, Play operated flights to major destinations such as:
- London Stansted
- Amsterdam
- Paris Charles de Gaulle
- Alicante
- Faro
The last flight from Reykjavik to London Stansted arrived on schedule at 10:40 AM on Monday, only to have its return flight canceled.
Reasons Behind Play Airlines’ Downfall
Despite ambitious plans, Play struggled with severe financial losses throughout its operation. The airline lost approximately $66 million (£49 million) in 2025 alone, leading the chief executive, Einar Orn Olafsson, to declare the need for a revised strategy while projecting profitability in 2026. However, aviation analyst Sean Moulton noted that Play’s attempt to replicate Wow Air’s model proved challenging due to limited market capacity.
In addition, with Iceland’s small population, sustaining a profitable airline model became increasingly difficult. Moulton commented that this gap would likely lead to opportunities for the more established carrier, Icelandair.
What Affected Passengers Should Do Next
Passengers who have upcoming bookings with Play are advised to explore alternative travel options immediately. Typically, airlines provide “rescue fares” to those affected by bankruptcy, allowing them to book at reduced prices. However, Icelandair has stated it is not yet offering such fares but is working to increase availability on routes previously serviced by Play.
For those currently stranded, options like British Airways and American Airlines are offering fares as low as £211 for flights from Baltimore to the UK. Passengers are encouraged to check with their travel insurance providers for assistance with any additional costs incurred due to this disruption.
Understanding Your Rights as a Passenger
For travelers holding forward bookings with Play, it is important to know your rights. According to Andrew McConnell from the UK Civil Aviation Authority, customers are urged to consult their website for updates. Most payments made via credit or debit cards will typically be refunded without issue.
Passengers who booked package holidays that include Play flights may be entitled to alternative travel arrangements or a full refund from the trip organizer.
Compensation for Delayed or Canceled Flights
If you experienced delays or cancellations on Play flights in the past, you might find that compensation claims have been impacted by the airline’s closure. Any approved claims that have not yet been settled will no longer be paid out. For those impacted by extra expenses due to cancellations, travel insurance may offer some relief.
The Financial Stability of Other Airlines
In contrast to Play, many well-known airlines utilized by British travelers, such as British Airways, easyJet, and Ryanair, are currently reporting stable financial conditions. With the aviation landscape evolving, it remains crucial for travelers to stay informed about their options.
For more insights, listen to industry expert Simon Calder’s podcast featuring the Play Airlines CEO from July 2024.
