PLAY Airlines, the red-liveried Icelandic low-cost carrier based out of Keflavik International Airport, has ceased operations after just over four years in the skies. Recent months have seen the airline make drastic cuts to its transatlantic network as it looked to reposition itself as a European operator.

The carrier has also has also transitioned to being a privately held company in 2025, while looking to increase its wet-lease operations as scheduled flights began to take a back seat. PLAY has cited a wide variety of reasons for its eventual collapse, which brings an end to an optimistic period of Icelandic aviation history where the plucky young startup attempted to do what fellow LCC WOW Air could not.

The End Of An Era

In a statement released earlier this morning, Icelandic low-cost operator PLAY Airlines confirmed that its board had pulled the plug and taken the difficult decision to cease the red-liveried budget carrier's operations. This has resulted in the cancellation of all of its flights, with PLAY advising passengers "to check flights with other airlines, [as] some may offer special 'rescue fares' considering the circumstances."

As far as reimbursement for the cancelled flights is concerned, PLAY has told passengers to contact card issuers for tickets booked with credit cards, while those with bookings as part of larger tour packages should reach out to their travel agent. The airline, which has said that it "will work closely with authorities and employees to implement necessary measures to wind down operations," went on to explain that:

"Every effort was made to reach a different outcome. This decision is the most painful one imaginable in this situation and has only been taken because all other options were deemed exhausted. The Board sincerely apologizes to everyone negatively affected by this outcome."

Various Factors Involved

Rather than having been triggered by a single event, PLAY cites a catalog of different reasons as having collectively been responsible for its decision to cease operations. For instance, the carrier says that its performance has not matched expectations, with poor ticket sales in recent weeks and months.

In the case of the latter, the Icelandic low-cost carrier indicated that "negative media coverage of its operations" had been a driving force. Away from the passenger side of things, it has also emerged that the airline has had to deal with more than its fair share of internal turmoil. Indeed, on this front, it also notes that "there has been discontent among some employees due to changes in the company’s strategy."

The latter point likely refers to the revised business model that PLAY introduced last fall. As the carrier notes, the plan had been a source of great hope and optimism, but, ultimately, would have benefited from being implemented earlier. With this in mind, it concludes that "these changes cannot deliver results sufficient to overcome the company’s deep-rooted challenges that have built up over time" at PLAY.

Following In The Footsteps Of WOW Air

Long-term observers of the commercial aviation industry in Iceland will be painfully aware that PLAY's story is all too familiar. The carrier was founded in 2019 and operated its first flight in June 2021, with the ambition of succeeding where WOW Air had failed: to establish a budget airline in Iceland that served both Europe and North America, with passengers using it to fly one-stop itineraries between the two regions.

It is widely accepted that a key reason for WOW Air's failure was that the purple-clad all-Airbus operator shot itself in the foot by trying to do too much too soon as far as the growth of its fleet and network was concerned. For this reason, PLAY endeavored to chart a more sustainable expansion path. However, it seems that North America ultimately ended up proving to be too tough a nut for PLAY to crack.

The airline made multiple cuts to this side of its network after the new year. Hamilton and Washington DC were among the early casualties, with the aircraft used on remaining routes being downsized. By June, PLAY had confirmed that it would end all of its remaining US routes, which was a sign that the writing was on the wall. Around 400 job losses are expected as the curtain comes down on PLAY's story.