Reykjavík, Iceland: Icelandic budget airline Play Airlines has announced the immediate suspension of all flights and the cessation of its operations on September 29, 2025. The unexpected shutdown has left roughly 1,750 passengers stranded at destinations across Europe and North America. The airline cited ongoing financial difficulties, declining ticket sales, and internal operational challenges as the main reasons behind the abrupt closure.
Around 500 employees have lost their jobs due to the closure, including pilots, cabin crew, and administrative staff. Play Airlines has stated that it is working to provide guidance and support to its workforce during the transition.
Founded in 2019 by former executives of WOW Air and Primera Air, Play Airlines launched operations in 2021 with the goal of offering affordable transatlantic flights connecting Reykjavik’s Keflavík International Airport with European and North American cities. While the airline initially gained traction among price-sensitive travelers, it struggled to maintain profitability amid intense competition and rising operational costs.
Until Monday morning, Play Airlines operated flights to several European cities such as London Stansted, Amsterdam, Paris Charles de Gaulle, Alicante, and Faro. The final flight from Reykjavik to Stansted landed on time at 10:40 a.m. on Monday. However, the aircraft remains at the airport, and the scheduled return flight to Reykjavik has been cancelled.
PLAY Airlines’ shutdown was driven by mounting financial losses that proved unsustainable. At the end of the previous year, the airline reported a loss of $66 million (£49 million), which amounted to roughly £31 per passenger. Although the airline’s most recent financial results in August 2025 projected that profitability might begin in 2026, these expectations never materialized. Aviation analyst Sean Moulton noted that PLAY attempted to replicate WOW Air’s model, linking secondary European cities with the U.S., but faced a limited market and low yields. Even after shifting strategy to focus on point-to-point leisure destinations, the small Icelandic population made it difficult for the airline to succeed independently.
The sudden suspension has caused significant disruption for passengers, many of whom are currently stranded abroad. Travelers are advised to contact their credit card providers, travel agencies, or flight insurers for refunds. In addition, some carriers may provide “rescue fares” for affected travelers seeking alternative routes.
Play Airlines collapse due to the ongoing challenges faced by low-cost carriers, particularly in the transatlantic market. Iceland has seen multiple budget carriers struggle in recent years, reflecting the volatility and financial pressures inherent in the aviation sector. Rising fuel costs, labor disputes, and competition from larger carriers have made it especially challenging for smaller airlines in the region to remain profitable.
