The company stated: “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.”
According to the announcement, poor performance, declining ticket sales following negative media coverage, and disagreements among staff regarding strategic changes all contributed to the collapse.
Failed business model shift
In late 2024, Play introduced a new business model that initially raised expectations of a turnaround. However, the airline acknowledged that the changes were not sufficient to overcome its longstanding financial challenges.
“In hindsight, these measures would have needed to be implemented much earlier,” the statement noted.
Job losses and passenger disruption
The shutdown leaves around 400 employees without jobs and forces thousands of passengers to rebook their journeys through alternative carriers. The airline also warned that its business partners are expected to face financial losses as a result.
The board emphasized that the decision to cease operations was taken only after all other options had been exhausted.
“The board sincerely apologizes to all those affected by this outcome,” the statement concluded.
The collapse of Play Airlines adds to a series of challenges faced by Iceland’s aviation sector in recent years, highlighting the vulnerability of smaller low-cost carriers in a competitive and financially demanding market.
Tags: Play Airlines
