Play Airlines ceases operations, cancels all flights

Published on Sep 29, 2025, 8:48 pm CDT

4 min read

Iceland-based ultra-low-cost carrier PLAY has ceased operations and canceled all flights effective September 29, 2025. The airline posted a notice to customers advising them to seek alternatives on other carriers, noting that some may offer "rescue fares." Keflavík operators activated contingency plans, and regulators confirmed the shutdown. Affected travelers are being directed to their card issuers or travel advisors for refunds, with additional protections possible under EU passenger rights.

Key Points

Why it matters: All PLAY flights are canceled, stranding passengers and disrupting transatlantic low-cost options.
Travel impact: Expect limited capacity via Iceland; rebooking may raise fares on remaining routes.
What's next: Administrators will manage the wind-down; airports and regulators are guiding passengers.
Refunds: Card chargebacks or package protections may apply under EU 261.
Rescue fares: Some airlines may publish limited-time discounts for stranded travelers.

Snapshot

PLAY confirmed it has ceased operations and halted all flights, advising customers to rebook with other airlines. Keflavík Airport implemented its airline-shutdown contingency plan immediately after the announcement, reporting 12 PLAY cancellations at the airport on September 29 and approximately 1,750 impacted passengers. The UK Civil Aviation Authority also confirmed that PLAY, licensed to operate from Stansted and Liverpool, has ceased operations. Company communications indicate passengers who purchased with payment cards should contact their card issuer for refunds, while those who booked package holidays through EEA travel agencies should work with their agent. PLAY added that some carriers may publish "rescue fares," and that additional rights may apply under EU air passenger regulations.

Background

PLAY launched service in 2021 and built an Iceland-centric network connecting North America and Europe via Keflavík Airport (KEF). The carrier pursued an ultra-low-cost model similar to other Icelandic ventures, competing primarily on price and efficient Airbus narrowbody operations. Despite growth spurts and seasonal U.S. flying, results remained volatile. In recent months the airline and local media chronicled weaker ticket sales and mounting headwinds. On September 29, the board announced it would cease operations, and a stock exchange notice formalized the decision. KEF's operator and national media detailed airport-level impacts, while the UK Civil Aviation Authority issued passenger guidance tied to the carrier's UK licenses.

Latest Developments

Refunds, rescue fares, and EU 261: What stranded travelers can do now

PLAY's shutdown notice directs cardholders to contact their card issuer for refunds, which may be pursued through chargeback rules where applicable. Travelers who purchased packages through EEA-based agencies should contact their travel agent for assistance, as package travel protections may apply. Some carriers may offer time-limited "rescue fares" to help repatriate stranded passengers; availability and eligibility will vary by route and capacity. Under EU 261, travelers may have certain rights when flights are canceled, though airline insolvency changes the practical recovery path. Meanwhile, KEF has deployed on-site support to inform travelers of rights and options, and the UK Civil Aviation Authority has published guidance specific to PLAY's UK operations.

Analysis

PLAY's collapse removes a price-disruptive player from the North Atlantic, especially for budget-minded travelers who used Icelandic connections to hop between smaller U.S. and European markets. Near term, passengers face higher rebooking costs due to constrained capacity and short-notice demand spikes. Icelandair is likely to absorb some traffic by adding seats where feasible; however, any rapid capacity substitution will be limited by fleet, crew, and slot availability. Secondary effects include pressure on fares across shoulder and peak periods, as the loss of an ultra-low-cost competitor typically reduces fare sales and last-minute deal depth.

For affected travelers, the most reliable paths are card chargebacks, package protections via EEA agencies, and opportunistic rescue fares from competitors. EU 261 rights still inform expectations around cancellations, but insolvency-driven shutdowns often shift recovery from the airline to financial intermediaries and travel organizers. At the airport level, KEF's contingency execution and regulator messaging should help with triage, yet the operational ripple may persist several days as displaced passengers rebook. The broader takeaway: transatlantic ULCC models remain fragile when fuel, seasonality, and brand perception swing against them.

Final Thoughts

PLAY's exit underscores how thin the margins are for transatlantic ultra-low-cost carriers, particularly in shoulder seasons and demand shocks. Travelers seeking bargains should monitor competitors for added capacity or rescue fares, act quickly on refunds via card issuers or travel advisors, and verify EU 261 applicability. For Iceland-bound trips, check alternate routings through major hubs and allow extra buffer time while schedules reset. We will continue to track airport capacity responses and traveler options in the wake of Play Airlines ceases operations.