Play Airlines, the Icelandic low-cost carrier that primarily operated a fleet of Airbus A320neos, has shut down operations after roughly four years in the air. The message on its site is blunt: all flights are canceled.
With over 500 employees out of work, and thousands of travelers left to sort out trips to Reykjavík and beyond, the situation is looking bleak for everyone involved. For Iceland’s aviation sector, however, such devastation has become a predictable occurrence.
The airline follows a familiar arc for Icelandic upstarts; Primera Air collapsed in 2018 and Wow Air in 2019. Yet where some saw disaster, entrepreneurs saw opportunity. Play was born from Wow’s ashes in 2019 and began flying in June 2021, pursuing the same hub-and-spoke concept through Keflavík: offering cheap “point-to-point” links to Europe and a transatlantic hop to the U.S. However, it never managed to shake off the losses.
The company said earlier this year that it would turn the corner by 2026. Instead, it ran out of runway after reporting a $66 million loss in 2024, equating to roughly £31 per passenger, and continued to bleed cash into 2025.
As recently as Monday morning, Play was still operating European routes, including London Stansted, Amsterdam, Paris CDG, Alicante, and Faro, as well as a single U.S. leg to Baltimore/Washington. The last Stansted arrival from Reykjavík touched down at 10:40 a.m. local time, but the return was canceled, and the aircraft sat. By afternoon, departures were grounded.
If you’re stranded, move fast. In collapses like this, other carriers sometimes publish “rescue fares” for people holding dead tickets. Icelandair is the obvious lifeline on Iceland routes, though it says it isn’t offering special pricing at the moment and is instead trying to add seats on ex-Play routes.
In case you’re stuck in Baltimore heading to the U.K., routing to New York and jumping on British Airways or American is a workable plan — same-day fares have been as low as about £200 one-way on late flights, which isn’t nothing but beats sitting and waiting.
Should you have a future Play ticket, your best shot is your payment method. If you paid by credit card (or many debit cards), ask your bank for a chargeback — U.K. issuers typically refund airline failures without a fight.
However, if your Play flights were part of a package holiday, the tour operator must either rebook you or return your money in full. Sadly, if you were chasing EU/UK261 compensation for a previous delay or cancellation and hadn’t been paid yet, that claim is likely to disappear with the company; travel insurance may help with out-of-pocket costs, not compensation.
Quick guide for travelers:
- If you’re stuck abroad, book an alternative itinerary now; availability is tightening by the hour. Keep receipts in case your insurer covers trip disruption.
- For upcoming trips on Play, contact your card issuer for a refund. Package holders should contact the tour operator directly.
- Don’t wait for official rescue fares. If they appear, great — but assume they won’t and act.
- Keep proof: booking confirmations, payment records, and any messages from Play. You’ll need them for banks/insurers.
Industry outlook after Play’s demise
Why did this happen? Analysts point to a narrow, low-yield market. The “Iceland bridge” works when planes are full and fuel and finance cooperate. It’s a harder sell linking secondary cities in Europe to the U.S. at ultra-low fares, especially when the local market is small. Play tried to pivot toward more leisure point-to-point flying, but time and cash ran out. We can expect Icelandair to fill some of the gaps.
For U.K. travelers wondering about knock-on risk, the big names — BA, easyJet, Jet2, Ryanair, Virgin Atlantic, Wizz Air — are described as financially solid right now. That doesn’t help if you’re due in Reykjavík tomorrow, but it matters for the rest of your autumn travel plans.
One last thing: if you’re weighing whether to hang around for official guidance, don’t. In airline busts, speed usually beats patience. Book something you can afford, document everything, and sort the refunds afterward.
Sources: Play Airlines, Independent