Iceland’s PLAY ceases operations

Iceland-based low-cost carrier PLAY, which had focused on providing low fares between Europe and North America via Iceland, later pivoting to flying direct leisure services from/to Iceland, has announced that it would cease operations.

In an announcement on September 29, 2025, the airline cited its weaker-than-expected performance, poor ticket sales “following negative media coverage of its operations,” and discontent among employees due to changes in the company’s strategy.

“In light of the above, PLAY is ceasing operations today. Thousands of passengers will need to reorganize their return journeys, around 400 people will lose their jobs, and the company’s partners will suffer losses.”

While hindsight is always 20/20, the new business plan should have been implemented sooner, PLAY stated, adding that its executives had made every effort to avoid this 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 announcement read.

Just a few weeks ago, PLAY, in addition to reporting a record-high unit revenue in August 2025, also highlighted that it had issued a two-year convertible bond, which underpinned investors’ confidence in the airline and its future. The bond was oversubscribed at $23 million, PLAY said.

“The financing significantly strengthens the company’s operational foundation and enables PLAY to focus on profitable projects and continued growth.”

During the summer, there was some corporate drama surrounding the airline. In June 2025, the company announced that Einar Örn Ólafsson, the chief executive officer (CEO) of PLAY, and Elías Skúli Skúlason, the Vice Chairman of the Board of PLAY, had offered to take the low-cost carrier private by acquiring all of the company’s shares.

PLAY’s shareholders would have received ISK1 ($0.0082) per share.

However, the offer was withdrawn in July 2025, with the statement citing many shareholders’ desire to keep the airline public. “In light of this, the takeover group has decided to withdraw its plans to make a voluntary takeover offer for the company's shares but will continue to support the company in the journey ahead, which is backed by strong shareholder consensus.”

The airline ended Q2 2025 with a net loss of $15.3 million and a negative shareholders' equity $81.5 million, a stark contrast to its negative shareholders’ equity of $3.5 million at the end of Q2 2024. Cash and cash equivalents had dwindled to $11.9 million at the end of the period, its financial filings showed.

At the time, Ólafsson said that PLAY’s strategic pivot to wet lease and leisure services from Iceland had been unfolding “as planned.”

“We are deliberately shifting our network toward more profitable leisure destinations and building a more resilient business model with diversified revenue streams.”

Furthermore, the airline said that it had up to four aircraft with long-term wet lease agreements with Ukraine’s SkyUp, which has a subsidiary in Malta, through 2027. Planespotters.net data showed that PLAY had 10 aircraft: six Airbus A320neo and four A321neos, with three of the latter being re-registered to its Maltese air operator’s certificate (AOC) between March and June 2025.

PLAY, which began flying in June 2021 and slowly began offering one-stop, low-cost trips between Europe and North America, announced its strategic pivot in October 2024. Then, the company detailed that its point-to-point network, primarily from Iceland to Southern Europe, “has been popular and profitable from the beginning.”

Its transatlantic routes had suffered from “disappointing” yields in 2024, with airlines supplying more capacity on flights from/to North America, negatively impacting PLAY’s results.

In addition to focusing more on its leisure network from Iceland to European destinations, the airline said that it would begin offering aircraft, crew, maintenance, and insurance (ACMI) services to other carriers. Its first client was United States-based GlobalX, which utilized PLAY’s aircraft between November 1, 2024, and March 15, 2025.

PLAY planned to fully transition its network to point-to-point by October 2025, with four out of ten aircraft operating out of Iceland, with an additional five being placed with other operators, as highlighted in its Q2 2025 earnings report.

It was scheduled to release its Q3 2025 financial results on November 4, 2025.