Iceland’s Low-Cost PLAY Ceases Operations, Cancels All Flights

Updated: September 29, 2025, 7:16am CDT

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Table of Contents

PLAY Goes Under
What To Do if Your Airline Goes Out of Business
Final Thoughts

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Some big news from Iceland this morning: Low-cost PLAY announced on its website that it had ceased operations, and all flights have been canceled.

Here’s what to know, and what you should do if you have a flight on PLAY.

PLAY Goes Under

PLAY, the Icelandic low-cost airline, announced on September 28 that, effective immediately, it would cease operations.

“There are many reasons behind this decision,” the airline said, according to a statement posted by Iceland Monitor. “The company’s performance has long fallen short of expectations, ticket sales have been poor in recent weeks and months following negative media coverage, and internal disagreements among some employees regarding strategic changes have further strained the situation.”

This marks the end of a tumultuous year for PLAY, which has long struggled financially. The airline launched to much fanfare in 2021, offering some of the cheapest flights available to its hub, Reykjavik (KEF), and many European destinations.

Play airline Iceland Airbus 321neo — An A321neo from PLAY. Image Credit: Ryan Smith

PLAY tried to turn things around by transferring its entire fleet to Malta, leasing out its fleet, and ending transatlantic flights.

The airline had planned to end all U.S. flights in October, and instead would “[focus] on the profitable aspects of the business,” CEO Einar Orn Olafsson said this summer. Now, those plans won’t happen.

Bottom Line:

PLAY becomes the third low-cost airline to exit the Icelandic market. You may recall Iceland Express, which ceased operations in 2012 and rebranded as WOW Air. That airline folded, too, filing for bankruptcy in 2019.

What To Do if Your Airline Goes Out of Business

Unfortunately, we’ve been here before. Thomas Cook, the British tour operator, famously left thousands of travelers stranded in 2019 when it filed for bankruptcy.

If you’re already on your trip, here are some options to get home if your airline goes out of business:

Contact other airlines and ask about rescue fares, Competing airlines often offer “rescue fares” to passengers stranded when an airline goes under.
Book an award ticket. If you have miles or credit card points, this is the time to use them to get home.
File a claim with your insurance company.

If you haven’t taken your flight, your best course of action is to dispute the charge with your credit card company. You should be able to get your money back, thanks to the Truth in Lending Act, because the airline did not fulfill its end of the agreement.

Final Thoughts

PLAY Airlines has ceased operations, and with it, travelers lose another low-cost option to Europe. This isn’t the most unexpected news, given the PLAY’s struggles, but it’s still unfortunate for travelers and the airline’s employees alike.