Play Airlines Abruptly Ceases Operations, Leaving Travelers in Limbo
In a sudden and stunning collapse, Icelandic low-cost carrier Play Airlines announced on Monday, September 29, 2025, that it was immediately halting all flights and entering liquidation. The move stranded thousands of passengers across Europe and North America, many of whom were left scrambling for alternative flights during peak fall travel season.
What Happened?
Play Airlines, founded in 2019 and launched in 2021, marketed itself as a budget-friendly connector between North America and Europe via its hub at Keflavík International Airport near Reykjavík. Despite rapid expansion—adding routes to 25 cities across the U.S., Canada, and Europe—the airline cited “unsustainable fuel costs, rising interest rates, and weak summer demand” as reasons for its abrupt shutdown.
“We explored every option to continue operations, but the financial realities left us no choice,” the airline said in a brief statement posted to its website before it went offline.
Infographic: Play Airlines – Rise and Fall
| Metric | Detail |
|---|---|
| Founded | 2019 (Operations began 2021) |
| Fleet Size at Collapse | 7 Airbus A320/A321neo aircraft |
| Destinations Served | 25 (including Boston, New York, London, Berlin, Paris) |
| Passengers Stranded (Est.) | 12,000–15,000 |
| Employees Affected | Approx. 300 |
| Predecessor Collapse | WOW Air (2019)—Iceland’s previous budget airline |
Passenger Chaos Across Continents
- At Keflavík Airport: Over 1,200 travelers were left without flights or clear guidance.
- In the U.S.: Passengers in Boston, Baltimore, and Orlando reported canceled return flights with no refund process.
- Refund Outlook: Experts say travelers who paid by credit card may recover funds, but those using debit cards or third-party booking sites face steep hurdles.
Why Did Play Fail?
While Play Airlines initially thrived on post-pandemic travel demand and ultra-low fares (some transatlantic tickets under $200), analysts say its business model was fragile:
- No interline agreements: Couldn’t partner with other airlines for rebooking.
- High dependency on fuel hedging: Failed to lock in favorable rates as oil prices surged in 2024–2025.
- Limited brand loyalty: Attracted price-sensitive travelers unlikely to pay extra for flexibility.
Iceland’s Budget Airline Curse?
Play is the second Icelandic ultra-low-cost carrier to collapse in six years, following WOW Air in 2019. Both promised cheap transatlantic flights but struggled with thin margins and volatile operating costs.
“Iceland’s geographic advantage is also its curse,” said aviation analyst Lena Karlsson. “It’s a great stopover—but not a sustainable base for a standalone airline without deep pockets.”
What Should Stranded Passengers Do?
Travel experts recommend:
- Contact your credit card company immediately to dispute charges.
- Check if your ticket was part of a package protected under EU Regulation 261/2004 (if departing from Europe).
- Avoid rebooking through unofficial “rescue” sites—many are scams.
- Monitor Iceland’s Transport Authority for updates on passenger compensation.
