Commercial Aviation
PLAY Airlines Ceases Operations Highlighting Iceland Budget Aviation Challenges
PLAY Airlines shuts down amid financial losses, affecting Iceland’s aviation sector and tourism industry in 2025.
The sudden collapse of PLAY Airlines on September 29, 2025, marks a significant event in the ongoing saga of Iceland’s budget Airlines sector. As the third major Icelandic low-cost carrier to fail in less than a decade, PLAY’s shutdown underscores the persistent challenges facing airlines operating out of one of Europe’s smallest and most isolated markets. This article examines the rise and fall of PLAY, the financial and operational pressures that led to its demise, and the broader implications for Iceland’s economy and the global Aviation industry.
PLAY’s closure not only disrupts travel plans for thousands of passengers but also raises questions about the viability of low-cost transatlantic models and the structural vulnerabilities of Iceland’s aviation sector. The airline’s brief history is instructive for industry observers, policymakers, and entrepreneurs considering the future of air travel in and out of Iceland. By analyzing PLAY’s trajectory alongside the recent history of WOW Air and Primera Air, we can better understand the market dynamics and strategic missteps that have repeatedly challenged Icelandic carriers.
This analysis draws on official announcements, financial disclosures, industry commentary, and tourism data to provide a comprehensive and fact-based narrative. The goal is to offer a neutral, evidence-driven account of PLAY’s final days and the lessons that may be drawn for the broader aviation ecosystem.
PLAY Airlines was launched in 2019 by former executives of WOW Air, seeking to fill the gap left by WOW’s dramatic bankruptcy earlier that year. Backed by Avianta Capital, with deep ties to the Ryanair founding family, PLAY aimed to replicate the budget transatlantic model, connecting Europe and North America via Reykjavik’s Keflavik International Airport. The airline’s strategy focused on operating a modern, fuel-efficient fleet of Airbus A320neo and A321neo aircraft, deliberately avoiding the wide-body aircraft pitfalls that contributed to WOW Air’s downfall.
PLAY commenced operations in June 2021, at a time when the aviation industry was still reeling from the COVID-19 pandemic. Despite a slow start, the airline expanded rapidly, serving up to 14 destinations and targeting one million passengers in its first year. Its business model emphasized low fares, high aircraft utilization, and a network of secondary cities, aiming to attract price-sensitive travelers seeking alternatives to traditional carriers.
However, from the outset, PLAY faced the same structural challenges that had undermined its predecessors: a small domestic market, high operational costs, and the need to maintain high load factors on long, thin routes. While the airline achieved strong on-time performance and improved load factors in its final year, it struggled to generate the passenger volumes and yields necessary for sustainable profitability.
PLAY’s financial results reveal a pattern of persistent and deepening losses. In 2024, the airline reported an EBIT loss of $30.5 million on $292 million in revenue, amounting to a loss of about $31 per passenger. The situation worsened in 2025, with second-quarter losses reaching $15.3 million and cash reserves dropping to $11.9 million. Despite attempts to secure an additional $20 million in funding, these efforts proved insufficient to address the airline’s mounting operational deficits.
Cost pressures were a constant concern. PLAY’s cost per available seat kilometer (CASK) rose to 5.95 US cents in Q2 2025, up from 5.37 US cents the previous year, driven by currency fluctuations, higher aviation costs, and less efficient aircraft utilization. While the airline managed to increase revenue per available seat kilometer and yield per passenger, these gains were not enough to offset rising expenses and declining overall passenger numbers. Strategic pivots, including a shift from transatlantic hub operations to a leisure-focused, point-to-point European model, were implemented too late to reverse the airline’s fortunes. The decision to exit the North American market and transfer the airline’s Air Operator’s Certificate to Malta in 2025 were bold moves, but they did not resolve the underlying issues of scale, cost, and market demand.
“In hindsight, the new business plan should have been implemented earlier,” PLAY’s board acknowledged in its final statement, highlighting the critical importance of timely strategic adaptation.
By late September 2025, a combination of weak ticket sales, negative media coverage, and internal employee unrest culminated in PLAY’s abrupt decision to cease operations. The closure left approximately 400 employees jobless and thousands of passengers stranded or forced to rebook at higher prices. Unlike previous airline failures, there was no immediate offer of “rescue fares” from competitors, compounding the disruption for affected travelers.
PLAY’s advice to customers was limited, directing those who paid by card to seek refunds through their card issuers and package holiday travelers to contact their agencies. The airline also noted that EU Air Passenger rights might apply, but in the event of bankruptcy, claims would need to be filed with an appointed administrator, a process that rarely results in full compensation.
The impact extended beyond passengers and staff to suppliers, creditors, and Iceland’s broader aviation and tourism sectors. Aircraft lessors moved quickly to repossess the airline’s ten aircraft, while service providers faced potential financial losses from unpaid invoices.
PLAY’s demise is not an isolated incident but part of a pattern that has seen multiple Icelandic carriers fail in recent years. WOW Air’s bankruptcy in 2019 and Primera Air’s earlier failure in 2018 both exposed the challenges of sustaining low-cost operations in a geographically isolated market with limited local demand.
WOW Air’s bankruptcy, which left thousands stranded and led to a projected 16% drop in tourist visits, had a profound effect on Iceland’s economy. The Central Bank of Iceland estimated a 0.4% contraction in GDP as a direct result. The concentration of airline capacity among a few carriers means that each failure creates a significant gap that is not easily filled by competitors.
Structural issues, such as Iceland’s small population, high costs, and dependency on volatile tourism flows, limit the ability of new entrants to achieve the economies of scale necessary for long-term survival. The country’s reliance on connecting traffic and the seasonality of demand further complicate efforts to maintain consistent profitability.
The timing of PLAY’s collapse is particularly problematic for Iceland’s tourism industry, which remains a cornerstone of the national economy. In 2024, tourism accounted for 8.7% of GDP and nearly 10% of all hours worked in the country. The sector had nearly recovered to pre-pandemic visitor levels, with 2.3 million foreign overnight guests, but growth had turned negative and inbound spending was declining. PLAY’s exit reduces available airline capacity, potentially increasing fares and making Iceland less accessible to international travelers. Since 99% of visitors arrive via Keflavik International Airports, any reduction in seat supply has immediate effects on tourism flows.
Employment impacts are also significant. The loss of 400 jobs at PLAY, combined with secondary effects on suppliers and service providers, creates a notable shock in a small labor market. Currency pressures and fiscal impacts could follow, as seen after WOW Air’s collapse when the Icelandic króna weakened by 3.7% in response.
PLAY’s failure is part of a wider wave of airline bankruptcies in 2025, reflecting persistent industry headwinds. Other notable collapses include Silver Airways in the US, Air Belgium in Europe, and several Brazilian carriers, all facing similar issues of high costs, debt burdens, and volatile demand.
Analysts point to the lingering effects of pandemic-era debt, increased competition, and the inability of smaller carriers to access the capital needed to survive prolonged losses. In Russia, over 30 airlines are reportedly at risk due to sanctions and economic pressures, illustrating the global nature of the sector’s vulnerabilities.
Within this context, PLAY’s limited scale and access to funding made it particularly susceptible to cash flow shocks. The airline’s experience underscores the growing importance of financial resilience and strategic agility in a turbulent industry environment.
“PLAY tried to replicate Wow Air, connecting secondary cities Europe to the US. But the market is limited and low yield.” – Aviation analyst Sean Moulton
The collapse of PLAY has reignited debate over the adequacy of passenger protections in the event of airline bankruptcies. Unlike package holidays, individual airline tickets often lack insolvency protection, leaving travelers exposed to significant financial losses.
Following the shutdown, PLAY directed passengers to seek refunds through their card issuers or travel agents, but provided no direct reimbursement. The European Travel Agents’ and Tour Operators’ Association (ECTAA) has renewed calls for a mandatory airline insolvency protection fund, similar to Denmark’s system, to address these recurring issues.
Travel insurance coverage for airline failure remains inconsistent, and the absence of rescue fares from competitors leaves stranded passengers with limited recourse. The situation is especially acute for those mid-journey at the time of collapse, who face immediate and potentially substantial rebooking costs. PLAY Airlines’ closure represents both an end and a warning for Iceland’s aviation sector. Despite experienced management, a modern fleet, and initial financial backing, the airline was unable to overcome the structural challenges of its market. Its failure leaves a gap in capacity, disrupts the travel plans of thousands, and adds to the economic uncertainty facing Iceland’s tourism sector.
The repeated failures of Icelandic budget carriers suggest that the market may not be able to sustain multiple competing airlines under current conditions. Future ventures will need to develop new approaches to cost management, market targeting, and financial resilience if they hope to succeed where others have failed. For now, Icelandair stands as the dominant carrier, but the lessons of PLAY’s brief existence will inform the strategies of all who seek to connect Iceland to the world.
What happened to PLAY Airlines? Can passengers get refunds for cancelled PLAY flights? Why do Icelandic budget airlines keep failing? Did Icelandair offer rescue fares after PLAY’s collapse? What are the broader implications for Iceland’s tourism sector? Sources: PLAY Airlines Official Announcement
PLAY Airlines Ceases Operations: The End of Iceland’s Latest Budget Aviation Experiment
The Rise and Fall of PLAY Airlines
Financial Performance and Mounting Losses
The Final Collapse and Immediate Impact
The Broader Context: Iceland’s Budget Aviation Struggles
Economic Implications for Iceland’s Tourism Sector
Global Industry Trends and the 2025 Bankruptcy Wave
Passenger Rights, Refunds, and Consumer Protection
Conclusion
FAQ
PLAY Airlines ceased operations abruptly on September 29, 2025, due to persistent financial losses, weak ticket sales, and internal and external pressures. All flights were cancelled, leaving passengers and employees affected.
Passengers are advised to seek refunds through their credit card issuers or, if they booked package holidays, through their travel agents. Direct refunds from PLAY are not offered, and claims in bankruptcy cases are typically handled by an appointed administrator.
Structural challenges, including a small domestic market, high operational costs, intense competition, and reliance on volatile tourism flows, have made it difficult for Icelandic budget airlines to achieve sustainable profitability.
Unlike previous airline failures, major competitors, including Icelandair, did not immediately offer rescue fares to PLAY’s stranded passengers.
PLAY’s closure reduces airline capacity, potentially increases fares, and may further pressure Iceland’s tourism recovery and economic growth, which relies heavily on air connectivity.
Photo Credit: PLAY Airlines
Route Development
Chicago O’Hare Launches Orchard-Inspired Concourse D Expansion
O’Hare International Airport’s $1.3B Concourse D with orchard-inspired design and 19 flexible gates is set to open in late 2028.
This article is based on an official press release from the City of Chicago.
On Thursday, February 5, 2026, Chicago Mayor Brandon Johnson and the Chicago Department of Aviation (CDA) released a detailed animated preview of “The New Concourse D” at O’Hare International Airports. Formerly known as Satellite Concourse 1, this $1.3 billion infrastructure project represents a pivotal phase in the airport’s massive ORDNext expansion program.
According to the official announcement, the new facility is currently under construction following a groundbreaking ceremony in August 2025. Scheduled to open to the public in late 2028, Concourse D is designed to modernize the passenger experience with a focus on wellness, natural light, and operational flexibility. The project is being led by the architectural firm Skidmore, Owings & Merrill (SOM), alongside partners Ross Barney Architects and Juan Gabriel Moreno Architects (JGMA).
The newly released video highlights a dramatic shift in design philosophy for the airport, moving away from industrial aesthetics toward a “nature-infused” environment that pays homage to the site’s history.
The central theme of the new concourse is a direct nod to O’Hare’s pre-aviation history as an apple orchard, originally known as Orchard Field, which gave the airport its “ORD” IATA code. The City of Chicago press release details how the interior architecture features tree-like structural columns that branch out to support the roof, creating a canopy effect intended to reduce travel stress.
A key feature of the design is the “Oculus,” a central skylight that serves as the building’s architectural focal point. The design team emphasizes that this feature is not merely aesthetic but functional, directing natural daylight deep into the building to aid in intuitive wayfinding.
“We designed the new satellite concourse to create a frictionless experience for travelers… The gate lounges feature column-free expanses for easy wayfinding, high ceilings to optimize views, and a daylighting strategy to help align the body’s natural rhythms.”
, Scott Duncan, Design Partner at SOM
The facility will include over 20,000 square feet of airline lounge space and 30,000 square feet dedicated to retail and concessions. In a move to accommodate modern traveler needs, the design also incorporates a dedicated children’s play area and multi-level communal seating equipped with integrated charging stations. Beyond the aesthetics, Concourse D is a critical component of the broader ORDNext (formerly O’Hare 21) capital program. The expansion is necessary to maintain O’Hare’s status as a global hub by increasing gate capacity and flexibility.
According to the CDA, the concourse will add 19 new flexible gates to the airport’s portfolio. These gates are designed with versatility in mind, capable of accommodating:
This flexibility allows the airport to adjust to shifting market demands between domestic and international travel without requiring physical construction changes.
“By breaking ground on Concourse D, we are taking a critical first step toward enhancing how the airport welcomes and serves more than 80 million passengers each year.”
, Michael McMurray, CDA Commissioner
Mayor Brandon Johnson emphasized the economic impact of the project, noting that it serves as an economic engine for the region. The city estimates the project will create approximately 3,800 construction jobs.
The rebranding of “Satellite 1” to “Concourse D” and the release of this high-fidelity animation signal a clear intent by Chicago officials to solidify the project’s identity before the steel rises significantly. By leaning heavily into the “Orchard” narrative, the CDA is attempting to differentiate O’Hare from other sterile, glass-and-steel global hubs.
From an operational standpoint, the “flexible gate” configuration is the most significant detail. As airline fleets evolve and the mix between wide-body international haulers and narrow-body domestic hoppers fluctuates, static gates can become liabilities. The ability to park two narrow-bodies in the footprint of one wide-body maximizes the return on Investments for this $1.3 billion asset, ensuring it remains relevant regardless of how airline strategies shift in the 2030s.
The project is currently active, with construction managed by the joint venture AECOM Hunt Clayco Bowa. The timeline provided by the city outlines the following key milestones:
Concourse D is located just south of the existing Concourse C (Terminal 1) and will be connected via a new walkway extension. It serves as the precursor to the eventual demolition of Terminal 2, which will make way for the future O’Hare Global Terminal.
Where is the new Concourse D located? When will Concourse D open? Why is it called the “Orchard” design? How much will the project cost?
O’Hare Unveils “Orchard-Inspired” Vision for New Concourse D
Design Philosophy: Returning to the Orchard
Operational Capacity and ORDNext Strategy
AirPro News Analysis
Timeline and Next Steps
Frequently Asked Questions
It is located directly south of the existing Concourse C at Terminal 1. It will be connected to the main terminal complex via a new walkway extension.
The City of Chicago and the Chicago Department of Aviation have scheduled the opening for late 2028.
The design pays tribute to “Orchard Field,” the original name of the airfield that became O’Hare. The interior columns resemble trees, and the layout emphasizes nature and light.
The budget for Concourse D is set at $1.3 billion.
Sources
Photo Credit: City of Chicago
Aircraft Orders & Deliveries
EgyptAir Receives First Airbus A350-900 to Modernize Fleet
EgyptAir accepts its first Airbus A350-900, starting a fleet overhaul with 16 aircraft to expand long-haul routes and improve efficiency.
This article is based on an official press release from Airbus and additional fleet data.
EgyptAir has officially taken delivery of its first Airbus A350-900, registered as SU-GGE, marking a significant milestone in the carrier’s modernization strategy. The handover, which took place on February 9, 2026, positions the Cairo-based airline as the first operator of the A350-900 in North Africa.
According to an official press release from Airbus, this aircraft is the first of 16 A350-900s ordered by the Egyptian flag carrier. The delivery underscores EgyptAir’s commitment to phasing out older wide-body jets while expanding its long-haul network capabilities to new destinations in North America and Asia.
The arrival of the A350-900 represents a pivotal shift in EgyptAir’s long-haul operations. The airline originally signed for 10 aircraft during the Dubai Airshow in November 2023, later expanding the commitment with a top-up order for six additional units. These new airframes are intended to replace the carrier’s aging Boeing 777-300ER fleet, offering improved operating economics and passenger comfort.
In a statement regarding the initial order, Yehia Zakaria, EgyptAir Holding Chairman and CEO, highlighted the flagship status of the new type:
“The A350-900 will be our flagship aircraft… adding the world’s most modern and efficient widebody aircraft to our fleet will be instrumental in expanding our offering.”
Christian Scherer, Chief Commercial Officer at Airbus, noted the economic advantages the aircraft brings to the airline’s network:
“The A350 is the one and only aircraft enabling EgyptAir to open up its network with benchmark economic efficiency, not to mention passenger comfort.”
EgyptAir has outlined a phased entry-into-service plan for the new fleet. Initially, the aircraft will be deployed on trunk routes to London and Paris to facilitate crew familiarization. Following this integration period, the airline plans to leverage the A350’s 9,700 nautical mile range to launch non-stop services to the U.S. West Coast and key Asian markets, including Shanghai, Beijing, and Tokyo.
The new A350-900 features a two-class configuration designed to maximize capacity while introducing updated premium amenities. According to fleet data, the aircraft accommodates a total of 340 passengers. Technological upgrades are a focal point of the new cabin. The aircraft is equipped with Panasonic Avionics’ Astrova in-flight entertainment system, providing 4K OLED screens and high-fidelity audio. Additionally, passengers across all classes will have access to USB-C fast charging ports and high-speed Wi-Fi connectivity.
The transition to the A350-900 aligns with broader industry sustainability goals. Powered by two Rolls-Royce Trent XWB engines, the aircraft is reported to burn 25% less fuel compared to the previous generation aircraft it replaces. This efficiency gain corresponds to a 25% reduction in CO2 emissions.
Furthermore, the A350 is recognized as the quietest aircraft in its class, possessing a noise footprint 50% smaller than older jets, a critical factor for operations at noise-sensitive airports in Europe and North America.
EgyptAir’s delivery secures its position as the sole active operator of the A350-900 in the North African region, a status solidified by the shifting strategies of its neighbors. While other carriers in the region had previously expressed interest in the type, market dynamics have led to cancellations and delays.
For instance, Air Algérie cancelled its order for A350-1000s in early 2025, opting instead for Airbus A330-900neos. Similarly, Tunisair cancelled its A350 commitments in 2013. Other regional orders, such as those from Libyan carriers Afriqiyah Airways and Libyan Airlines, remain stalled due to long-standing instability. Consequently, EgyptAir currently faces no direct regional competition operating this specific airframe, potentially offering it a product advantage on competitive routes connecting Africa to Europe and the Americas.
Sources:
EgyptAir Accepts Delivery of First Airbus A350-900, Initiating Major Fleet Overhaul
Fleet Modernization and Strategic Expansion
Operational Deployment
Cabin Configuration and Passenger Experience
Environmental Performance
AirPro News Analysis: Regional Market Context
Airbus Press Release
Photo Credit: Airbus
Route Development
SAS and TAROM Codeshare Connects Scandinavia and Romania in 2026
SAS and TAROM announce a codeshare agreement effective February 2026, enhancing connectivity between Scandinavia and Romania with SkyTeam benefits.
This article is based on an official press release from SAS Group.
Scandinavian Airlines (SAS) and TAROM, the flag carrier of Romania, have announced a comprehensive codeshare agreement set to commence on February 9, 2026. The partnership aims to restore and enhance connectivity between Northern Europe and Romania following SAS’s strategic shift to the SkyTeam alliance.
According to the official announcement from SAS Group, the agreement will allow passengers to book single-ticket journeys between the two regions by utilizing major European transit hubs. This move integrates TAROM, a long-standing SkyTeam member, more deeply with SAS, which officially joined the alliance on September 1, 2024.
The collaboration addresses a significant gap in network connectivity, offering business and leisure travelers seamless baggage check-through and reciprocal loyalty benefits. Paul Verhagen, EVP & Chief Commercial Officer at SAS, emphasized the strategic value of the deal in a statement:
“This new partnership with TAROM marks an important step in enhancing connectivity between Scandinavia and Romania. By combining our networks and offering smooth transfers via key European hubs, we are giving our customers more choice, flexibility, and convenience.”
Rather than launching direct flights immediately, the airlines are leveraging a “virtual hub” strategy. According to the press release, the codeshare will route traffic through four key intermediate airports: Amsterdam (AMS), Brussels (BRU), Frankfurt (FRA), and Prague (PRG).
Under the terms of the agreement:
This structure allows the airlines to offer competitive travel times and frequency without dedicating aircraft to direct point-to-point routes, which are currently dominated by low-cost carriers.
This agreement is a direct consequence of the major airline alliance realignment that occurred in late 2024. When SAS departed Star Alliance to join SkyTeam, it lost its traditional connectivity to Eastern Europe provided by partners like Lufthansa and Austrian Airlines. Partnering with TAROM allows SAS to rebuild its footprint in the region using SkyTeam infrastructure.
For TAROM, the deal unlocks access to the high-yield Scandinavian market. The Romanian carrier is currently in the midst of a fleet modernization program, transitioning from aging aircraft to new Boeing 737 MAX 8 jets expected to arrive in late 2025 and 2026. By utilizing SAS for the northern leg of the journey, TAROM can expand its network reach while conserving its own metal for other high-demand routes. Narcis Obeadă, Commercial Director at TAROM, hinted at further expansion in the company’s statement:
“In the coming period, TAROM will announce new commercial agreements, in line with the company’s mission to safely and efficiently connect Romania and Romanian culture to the international air transport network.”
Travelers utilizing the codeshare will benefit from the full suite of SkyTeam alliance perks. Members of SAS EuroBonus and TAROM’s loyalty program will be able to earn and redeem points on these codeshare flights. Additionally, premium passengers will gain access to SkyTeam lounges at transit hubs.
The passenger experience on the SAS leg of these journeys is also set for an upgrade. SAS is currently rolling out free high-speed Starlink WiFi across its fleet, a project the airline states will be widely available by late 2025.
The “Prague” Anomaly and Market Positioning
The inclusion of Prague (PRG) as a connection hub is a notable operational detail. Following the cessation of operations by Czech Airlines (CSA) as a standalone SkyTeam member in October 2024, Prague is no longer a primary alliance hub. The decision to route traffic through PRG suggests a strong bilateral interline capability between SAS and TAROM that functions independently of major alliance hub infrastructure.
Furthermore, this deal clearly targets the premium business segment. While low-cost carrier Wizz Air operates direct flights between Bucharest and Copenhagen, legacy carriers cannot compete purely on price. Instead, SAS and TAROM are competing on schedule flexibility (multiple daily frequencies via hubs) and corporate perks (lounge access, baggage interlining). With tourism to Romania rising, foreign arrivals were up 13.4% year-on-year as of August 2024, the demand for reliable, full-service connectivity is likely to grow.
When can I book these codeshare flights? Will my bags be checked through to the final destination? Do these flights count toward SkyTeam Elite status?
SAS and TAROM Launch Strategic Codeshare to Connect Scandinavia and Romania
Operational Details: The Virtual Hub Strategy
RO marketing code on SAS flights connecting Copenhagen, Oslo, and Stockholm to these intermediate hubs.SK marketing code on TAROM flights connecting Bucharest to the same hubs.Strategic Context: The SkyTeam Realignment
Passenger Experience and Loyalty
AirPro News Analysis
Frequently Asked Questions
The codeshare agreement is effective starting February 9, 2026. Tickets should be available through both airlines’ booking channels prior to this date.
Yes. Because this is a full codeshare agreement, passengers traveling on a single ticket (e.g., Bucharest to Stockholm via Amsterdam) will have their baggage checked through to the final destination.
Yes. Flights marketed and operated by SkyTeam members (SAS and TAROM) count toward tier status and accrue redeemable miles/points according to the rules of your specific loyalty program.
Sources
Photo Credit: SAS Group
-
Commercial Aviation4 days agoAirbus Nears Launch of Stretched A350 Variant to Compete with Boeing 777X
-
Aircraft Orders & Deliveries5 days agoHarbor Diversified Sells Air Wisconsin Assets for $113.2 Million
-
Defense & Military2 days agoApogee Aerospace Signs $420M Deal for Albatross Amphibious Aircraft
-
MRO & Manufacturing5 days agoFedEx A300 Nose Gear Collapse During Maintenance at BWI Airport
-
Defense & Military5 days agoAirbus and Singapore Complete Manned-Unmanned Teaming Flight Trials