Play Airlines go bust and cease operating.

[stadler]

Play Airlines based out of Iceland have just gone bust now and ceased operating:

Another low-cost airline has gone bust – here’s what you need to know

These are your rights if you have a booking with the carrier to Reykjavik or beyond

www.independent.co.uk

Another low-cost airline has gone bust – here’s what you need to know about your flights

These are your rights if you have a booking with the carrier to Reykjavik or beyond

Simon Calder Travel Correspondent

Tuesday 30 September 2025 11:43 BST

Play, a low-cost Icelandic airline, has shut down. The carrier is telling passengers: “All flights have been cancelled. We are deeply sorry for the disruption this causes and thank you for your understanding.”

Around 500 staff have lost their jobs.

The airline had been in existence for about five years. It follows former Icelandic carriers Primera Air and Wow Air into aviation oblivion. Those airlines failed in 2018 and 2019 respectively.

Play is telling passengers who have forward bookings: “We kindly advise you to check flights with other airlines.”

These are the key questions and answers.

What was Play Airlines?

Play was created in 2019 by two Wow Air executives, after that airline went bust. It started flying on 24 June 2021.

The business model was similar to Wow Air – and, indeed the national carrier Icelandair, which continues to be successful.

The aim was to cater for “point to point” traffic between Keflavik International airport outside Reykjavik and locations in Europe, as well as running a network to the US that capitalised on Iceland’s prime North Atlantic location.

Until Monday morning, Play was serving European destinations including London Stansted, Amsterdam, Paris CDG, Alicante and Faro. The last flight from Reykjavik to Stansted arrived on schedule at 10.40am on Monday. The aircraft is still on the ground, with the return to Reykjavik cancelled.

Departures from Monday afternoon onwards are grounded, including on the sole remaining US route to Baltimore Washington International.

What went wrong at Play?

Prodigious financial losses throughout its brief existence. While many carriers lost money during Covid, most of them have recovered. Not Play.

In February 2025, the chief executive, Einar Orn Olafsson, claimed the airline had been turned around, saying: “The transformation of Play’s business model is becoming increasingly evident … our revised flight schedule is already driving higher revenues and improved financials. Looking ahead to 2025, we are optimistic about continued progress.”

But that was at the end of a year in which Play had lost $66m (£49m), the equivalent of £31 for every passenger carried, which was evidently not sustainable.

Play’s most recent financial results were in August 2025, when it predicted profitability would begin in 2026.

The aviation analyst Sean Moulton said: “Play tried to replicate Wow Air, connecting secondary cities Europe to the US. But the market is limited and low yield.

“Whilst they tried to change strategies by focusing on point-to-point, leisure destinations, the Icelandic population is small and any airline would struggle with this alone.

“The gap will allow Icelandair to expand.”

The Independent estimates around 120,000 passengers have forward bookings with Play.

I am stranded due to the collapse of Play – what should I do?

Find another option as soon as possible. Standard airline practice is to offer “rescue fares” to passengers whose carrier goes bust. These are seats at low prices sold to travellers who can prove they have a valueless Play booking. But Icelandair, the obvious carrier to do so, says: “At this time, we are not offering special fares for Play passengers, but we are actively working to increase availability on routes previously operated by Play to better assist affected travellers.”

Passengers stranded in Baltimore who are heading for the UK should head for New York. British Airways and American Airlines are offering fares as low as £211 on the late flight tonight. Travel insurance may pick up the extra cost.

The Independent has asked British Airways and easyJet if they will offer rescue fares between Reykjavik and the UK.

I have a forward booking with Play. What are my rights?

Andrew McConnell, spokesperson at the UK Civil Aviation Authority, said: “It’s always unfortunate when an airline ceases operations, and we understand that Play Airlines’ decision will be unsettling for its employees and customers.

“UK customers seeking the latest information are advised to visit the Civil Aviation Authority’s website.”

The chances are that you paid with a credit or debit card. UK financial institutions will typically refund the payment without fuss.

If you have booked a package holiday for the future that includes flights on Play, the organiser of the trip is obliged to find an alternative way for you to reach the destination, or offer a full refund.

My Play flight last month was late or cancelled. Will I get the compensation I am due?

Sadly not. Even if a claim under air passengers’ rights rules has been approved, if the money has not yet been paid to you then it will not appear. This applies both for cash compensation and for reimbursement of expenses incurred as a result. Travel insurance may help with the latter.

Are other airlines in danger of collapse?

All the airlines that the vast majority of British travellers will fly on – including British Airways, easyJet, Jet2, Ryanair, Virgin Atlantic and Wizz Air – are in good financial shape.

Listen to Simon Calder’s podcast with the Play Airlines CEO from July 2024

So this is now the fifth Icelandic based budget airline to go bust and shut down.

They operated flights from Iceland to the UK and many Mainland European countries and to the USA as well. They also specialised in transatlantic flights. A lot of passengers travelled via Iceland to make transatlantic journeys.

Not good news for New York City Stewart Airport which now loses its second long distance airline and is left with no long distance flights. Atlantic Airways in the Faroe Islands stopped flying there last year and now Play Airlines too. It is a shame as it is by far the nicest of the four New York City airports.

Why does every single Icelandic budget airline end up going bust! That is the fifth one now! They just keep setting up and then going bust!

• Iceland Express (founded 2002 / ceased 2012)

• JetX Air (founded 2004 / ceased 2008)

• Primera Air (founded 2009 / ceased 2018)

• Wow Air (founded 2012 / ceased 2019)

• Play Airlines (founded 2021 / ceased 2025)

I am sure that a sixth Icelandic based budget airline will be set up within the next year or two which will then fail again within a couple of years times!

Icelandair is the only one that has lasted. They have been in service since 1937 for almost 90 years. They are a proper airport rather than a budget one. I think they may be state owned which could explain why they have lasted so long.

I wonder if there is something about Iceland that makes it more expensive and difficult to operate flights to. Notably it is the only major European country that Ryanair have never operated in. But with four Icelandic based budget airlines going bust it must be a very difficult market. Nobody seems to have much luck.

I am surprised though as Iceland is a very popular tourist destination. It is very busy for air traffic. Plus all of these airlines have also specialised in transatlantic flights with passengers changing planes at Reykjavik Keflavik airport. So definitely not short of passengers.

 

[edwin_m]

Icelandair was doing the transatlantic hub and spoke thing long before the others came along, and the ability to offer reasonable connections to less well known American destinations boosted numbers above what the small Icelandic population would generate on its own. Ryanair doesn't do connections and doesn't operate in North America, so wouldn't really be able to offer that sort of model. The low cost model for medium haul (without the complication of connections) has been tried by others such as Norwegian, and nobody has been able to make a big success of it.

 

[YorkRailFan]

A key difference between Play and Icelandair is that Play was a Low Cost Carrier, and Icelandair is more of a hybrid between low cost and full service like Air Baltic. Icelandair is obviously doing something right.

I wonder if Play were expanding too quickly for their own good.