Play Airlines Shuts Down, Leaving 400 Employees Jobless
In a sudden and shocking announcement, Play Airlines has ceased all operations with immediate effect, grounding every flight in its schedule.
Fly Play hf., the company behind the low-cost carrier, confirmed the news in an official statement today.
“The board of Fly Play hf. has decided to terminate operations, and all of the company’s flights have been canceled.
The company will work closely with authorities and employees to implement the necessary steps for winding down operations.
There are many reasons behind this decision. 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.”
Failed Strategy and Financial Struggles
The airline had attempted to revamp its operations with a new business model last autumn, which initially sparked optimism among stakeholders.
“Last fall, Play introduced a new business model that initially inspired significant optimism. Unfortunately, it has now become clear that these changes cannot deliver the results needed to overcome the airline’s deep-seated financial troubles.
Iceland’s PLAY Airlines has ceased operations as of today, canceling all flights following financial struggles, weak ticket sales, and staff unrest. A 2024 restructuring shifted focus to Europe, cut US routes, and relocated operations to Malta, but was ultimately unsuccessful. pic.twitter.com/CR7mI7lplW
— Airways Magazine (@airwaysmagazine) September 29, 2025
In hindsight, these measures would have needed to be implemented much earlier.”
Despite these efforts, Play Airlines could not recover from ongoing financial difficulties and declining ticket sales.
Similar incidents in the aviation industry, such as a recent TUI flight forced into an emergency landing at Birmingham after a bird strike, highlight the operational challenges low-cost carriers often face.
Hundreds of Jobs at Risk
The closure will directly impact around 400 employees, all of whom will now lose their positions.
Thousands of passengers will also face the challenge of rebooking flights, while business partners of the airline are expected to face financial repercussions.
“The board and management of Play emphasize that every effort was made to reach a different outcome. This decision is the most difficult possible and was only taken after all other options were fully exhausted.
The board sincerely apologizes to all those affected by this outcome,” the statement concluded.
Impact on Travellers and Partners
UK trippers who had planned passages with Play Airlines will need to seek alternative flights immediately, with many scrabbling to adjust their trip plans.
The airline’s abrupt cessation marks a significant blow to the low-cost aeronautics sector in Iceland and beyond, signaling the fragility of budget carriers in a largely competitive industry.
Play Airlines, formerly hailed for making European trips more accessible, is now an exemplary tale of ambition colliding with harsh, profitable realities.
