The passengers on Play flight OG 881 Dublin to Keflavik were about to board when the email arrived. ““Filed for bankruptcy. Cancel flight.”
That was it. The crew were stranded and the aircraft TF-PPD grounded.
Four of the airline’;s six a320s are leased out of Dublin
Flugfélag PLAY hf., the plucky low-cost carrier that had dared to revive Iceland’s budget aviation dreams after the spectacular fall of WOW Air in 2019, met its end in a swift and merciless sequence of events.
What unfolded was not merely a corporate failure but a stark reminder of the fragile, fleeting nature of low-margin ventures in the volatile world of air travel amid the lingering skuggi (shadows) of the COVID-19 heillifall.
The board of Fly PLAY hf. convened an emergency meeting overnight. Ticket sales data—meagre even for the shoulder season confirmed the airline’s coffers were barren. Internal memos, leaked later, reveal heated debates over a final rescue bid: a potential bridge loan from Nordic investors or a hasty asset sale.
With creditors circling and employee morale in freefall, the board concluded that continued operations would only deepen the debt. By 04:00, a draft statement)was prepared: operations would cease with immediate effect.
At 04:52, Aerotime.aero broke the news, citing sources close to the company: “Icelandic low-cost carrier PLAY Airlines has ceased operations, cancelling all flights and leaving thousands of passengers stranded.”
This aligned with the formal filing to Nasdaq Iceland at around 05:00. The board’s statement, terse and regretful, blamed “prolonged financial underperformance, poor ticket sales in recent weeks, and internal discontent among staff following changes to the company’s strategy.”
PLAY’s website, flyplay.com, updated with a stark notice: “All PLAY Airlines flights are cancelled. We are deeply sorry for the inconvenience this causes.” The six Airbus A320neos in the fleet in orange and purple liver were grounded at gates
At Keflavík flights—bound for Liverpool, Paris, and Alicante—were scrubbed without notice, stranding an estimated 1,200–5,000 passengers worldwide, with up to 120,000 bokings affected. Social media ignited; Flightradar24 tweeted at 13:26 GMT (but reflecting earlier tracking): “PLAY has ceased operations and canceled all flights… accumulated problems and continuing losses have forced this outcome.”) @RuvEnglish urged, “Passengers with tickets should contact their credit card company… Those stranded should investigate rescue flights with other carriers,” linking to a live blog on the airline’s collapse.
Images of bewildered travellers at gates flooded feeds, from Liverpool John Lennon Airport—where @PlanespotMike lamented, “Such sad news… a big loss for us”—to Baltimore, where the final US route evaporated mid-planning. Icelandair and easyJet scrambled to offer ad-hoc ferðir (flights), but chaos reigned; EU Regulation 261/2004 promised compensation, yet bankruptcy complicated claims. In Dublin Mike Kelly and Shaun’s aviation both flagged that an A320 in the classic red livery was on the ground in Dublin.
By midday, global outlets piled on. The New York Times reported at 12:13 GMT: “Play Airlines said it was ceasing operations, becoming the second low-cost airline in Iceland to collapse in the last six years.” Bloomberg followed at 11:15 UTC (04:15 GMT, but updated): “PLAY ceased operations Monday because of poor ticket sales and a failed turnaround plan, stranding thousands.” In Iceland, RÚV’s English service aired a segment at 15:49 GMT, interviewing Ólafsson, who voiced “deep regret” but defended the board’s decision as unavoidable to avert further skuldakjöl (debt spiral).
Unions decried the loss of 400 störf (jobs), warning of a ripple effect on local ferðaþjónusta (tourism). The Icelandic government, via the Samgöngustofa (Transport Authority), activated contingency plans, but no bailout was forthcoming—unlike WOW’s partial rescue in 2019.
Nasdaq filings confirmed bankruptcy proceedings, with assets like the A320neos eyed for wet-lease repurposing. X posts from avgeeks mourned the end: @airwaysmagazine noted, “For the second time in five years, Iceland has lost its low-cost airline.” Stranded passengers, from holidaymakers in Alicante to US backpackers in Reykjavík, turned to travel insurance or credit chargebacks, as ATOL protections covered few.
By evening, the Keflavík apron stood eerily empty, a poignant symbol of draumurinn sem dó (the dream that died).
WOW reimagined
Founded in 2021 as a successor to the bankrupt WOW Air, PLAY—styled as Flugfélag PLAY—launched with ambitious transatlantic routes from Keflavík to secondary US cities like Stewart (New York) and Baltimore-Washington, promising affordable ferðir (journeys) to the Land of Fire and Ice. Yet, from its inception, the airline grappled with cash flow problem.
By 2024, it reported earnings before interest and taxes of negative $31m, a “substandard” figure that CEO Einar Örn Ólafsson dismissed in February 2025 with optimistic vows of a turnaround. The strategy? A pivot to more holiday-oriented European destinations, wet-leasing aircraft to bolster cash flow, and even shifting operational oversight to a Maltese subsidiary, PLAY Europe, while surrendering its Icelandic Air Operator’s Certificate (AOC).
This reinvention, however, proved a false dawn. By mid-2025, PLAY had already slashed its North American network: Boston services ended on 15 September, Stewart on 1 September, and the last US route to Baltimore was slated for 24 October. S
hare prices on the Nasdaq Iceland had plummeted 70pc since October 2024, fuelled by strategic shifts that prioritised wet-leasing over scheduled flights. Negative media coverage amplified the woes, with reports of delayed refunds and subpar customer service tarnishing the brand.
Weak ticket sales in recent weeksexacerbated by seasonal dips and fierce competition from Icelandair—piled on the pressure. Analysts later likened it to a larger pattern of low-cost carriers succumbing to razor-thin margins and pandemic-era debts, much like Norwegian Air Shuttle or the ill-fated Primera Air.
In Icelandic parlance, this was a classic case of ofanflóð fjárhags (financial avalanche), where accumulated losses—estimated in the tens of millions outstripped hope of lifelines)from government aid or private investment. By late September, whispers of impending doom circulated in Reykjavík’s aviation circles, but few anticipated the velocity of the end.
The Deeper Currents:
PLAY’s failure was no isolated tragedy but a confluence of forces, echoing the Norse edda of hubris clashing with harsh elements.
Chronic losses from overambitious expansion, intensified by post-pandemic financial frailty, left scant buffer against 2025’s weak demand—ticket sales dipped amid economic squeeze and negative publicity over service lapses. The strategic swith to leisure routes and wet-leasing, while pragmatic, came too late; internal tenisonseroded operational efficiency, and the shift to Malta diluted Icelandic roots without salvaging the core model.
Competition from behemoths like Icelandair squeezed margins, while global trends—rising fuel costs and regulatory scrutiny on LCCs—sealed the fate. In the end, PLAY succumbed not to a single gale but a storm of accumulated veðrið illt (ill weather), stranding dreams as surely as it did passengers.
As the sun dipped below the Vestfirðir horizon that evening, Iceland’s aviation saga turned another page: a cautionary epilogue to low-cost ambition, where the thrill of budget flugferðir yields too often to the chill of reality. For those affected, the path forward lies in resilience—rebooking, reclaiming, and perhaps, one day, boarding anew.
