Icelandic budget airline PLAY shuts down operations immediately

Icelandic low-cost airline PLAY, officially known as Fly Play hf., has announced the immediate cessation of all operations. The decision comes after a series of financial setbacks, declining ticket sales, and internal staff disputes following strategic changes within the company.

The airline confirmed that all flights are cancelled, leaving thousands of passengers to rearrange travel plans and approximately 400 employees facing job losses. PLAY’s management stated they will collaborate with authorities and staff to ensure a smooth wind-down of operations.

Reasons Behind the Closure

PLAY’s board highlighted multiple factors leading to the shutdown:

• Persistent financial underperformance: Revenue and profitability fell short of expectations for an extended period.
• Declining ticket sales: Recent weeks saw a drop in bookings, exacerbated by critical media coverage.
• Employee dissatisfaction: Internal disputes emerged over strategic adjustments and operational changes.
• Ineffective business model changes: The revamped strategy introduced last year failed to address the company’s entrenched challenges.

Despite hopes that the new business model would stabilise the airline, it ultimately proved insufficient. Management admitted that earlier implementation might have improved outcomes but acknowledged that all options have now been exhausted.

Impact on Passengers and Partners

The airline’s sudden closure leaves thousands of passengers scrambling for alternative flights. Additionally, business partners and suppliers are expected to incur financial losses. The company extended apologies to all affected, emphasising that the decision was taken with heavy consideration and no alternative solutions were viable.

PLAY commenced operations in 2019, founded by former WOW Air executives with the mission of providing affordable Icelandic travel. The airline’s stock performance has been highly volatile, with a 70% drop in share value since October 2024. Following the closure announcement, Icelandair shares rose by 30%, reflecting market shifts in response to the exit of PLAY from the sector.

FAQ Section

Q: Why did PLAY airline shut down?
A: PLAY ceased operations due to prolonged financial underperformance, falling ticket sales, internal staff conflicts, and an unsuccessful business model revision.

Q: How many people lost jobs at PLAY airline?
A: Around 400 employees were impacted by the airline’s closure.

Q: What happens to passengers with booked flights?
A: Passengers are advised to contact PLAY directly for guidance on refunds or alternative travel arrangements.

Q: When did PLAY airline start operations?
A: PLAY began in 2019, founded by ex-WOW Air board members to provide low-cost flights to and from Iceland.

Q: Did PLAY’s closure affect Icelandair?
A: Yes, Icelandair shares increased by 30% following the news of PLAY’s shutdown.