PLAY Airlines has abruptly ceased operations and canceled all flights. I can’t say I’m surprised…
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PLAY Airlines calls it quits, cancels all flights
In 2021, we saw the launch of PLAY, an ultra low cost carrier in Iceland that intended to use Keflavik (KEF) to connect points in North America with points in Europe, just as Icelandair does. Unsurprisingly, this business model hasn’t proven to be a success, and the airline has been losing money since launch.
We’ve seen the airline try to reorganize several times, most recently cutting all flights to the United States, and pursuing a new strategy. However, all of that hasn’t been enough, and the airline has run out of money.
PLAY is now ceasing operations effective immediately, and will operate no more flights. The airline says it’s deeply sorry for the disruption this causes, and thanks customers for their understanding.
For those with tickets booked, the airline is advising customers to check with other airlines, as some may offer special “rescue fares,” given the circumstances. Regarding refunds and passenger rights:
- If you purchased your ticket with a credit card, the airline is advising customers to contact their credit card company for a refund
- If you booked your ticket as part of a vacation package through a travel agency, the airline is advising customers to contact the travel agency for assistance
- Some rights may also apply under EU Air Passenger regulations, and in case of bankruptcy, claims can be made with the appointed administrator
PLAY’s fleet currently consists of 10 latest generation aircraft, including six Airbus A320neos and four Airbus A321neos.
PLAY Airlines’ failure is sad but predictable
I’m sad for the roughly 400 employees at PLAY who are losing their jobs as a result of the airline ceasing operations. At the same time, this failure is anything but surprising, since the carrier’s business model never made sense in the first place.
In 2019, Icelandic ultra low cost carrier WOW Air ceased operations, and had a nearly identical business model to PLAY. Heck, many of PLAY’s executives were former WOW Air executives. However, they believed things would be different this time around. Well, they weren’t, and somehow that’s a surprise.
But we’ve seen this over and over again. As another example, in 2021, Norwegian discontinued long haul flights, as the airline tried to operate as an ultra low cost carrier across the Atlantic. Then Norse Atlantic replicated exactly that business model. Again, it hasn’t proven to be a success, and the airline is also now increasingly transitioning to leasing out aircraft.
Bottom line
PLAY Airlines is ceasing operations effective immediately, canceling all flights. The airline has been losing money since launch, and has been trying to restructure in recent months. However, there’s only so much you can restructure when your business model is bad in the first place, and you have a lot of debt.
What do you make of PLAY ceasing operations?
I flew Play a few times, and it wasn't bad at all - bare bones, and a little chaotic as all LCC are, but decent considering that. So I'm sad to see this.
I'm also intrigued that Wow and then Play didn't cannibalize enough of Icelandair's business to damage their similar business also.
They also stranded their employees, just like WOW did when they ceased operations. Spoke to some at a BWI area hotel and they have to find their own way back home.
I flew Play last year from Iceland to Dulles and I was pleasantly surprised. It was likely the best low cost carrier I have flown. It did help that the middle seat was empty and I was lucky because the flight was nearly full. I'm sad to see them go.
I loved PLAY and I also loved Wow and use both as often as I could as a semi retired tour guide that still takes people to Europe from the USA.
I always enjoyed going through Iceland and I don't like Iceland Air. I am disappointed
The ULCC business model does not work for long haul. You might be able to coax passengers into a 2-3 hour flight on an ULCC but when flight time starts to exceed five yours sitting in a 28 inch pitch seat being forced to pay for water is misery. Not to mention ever rising costs seemingly can't be passed onto higher ticket prices.
"The ULCC business model does not work for long haul."
Really ??? Where did that come from, George? Might be true in the USA market, but hey - not everywhere else.
Here's Jetstar (an Australian LCC) operating SYD-NRT (11 hrs, 30" pitch in Y), SYD-HNL (11.5 hrs, same pitch) etc and doing it quite profitably. Founded in 2003, so celebrating 22 years.
You could also look at LCC's such as Air Asia, several...
"The ULCC business model does not work for long haul."
Really ??? Where did that come from, George? Might be true in the USA market, but hey - not everywhere else.
Here's Jetstar (an Australian LCC) operating SYD-NRT (11 hrs, 30" pitch in Y), SYD-HNL (11.5 hrs, same pitch) etc and doing it quite profitably. Founded in 2003, so celebrating 22 years.
You could also look at LCC's such as Air Asia, several Korean LCC's and even Philippine Cebu Pacific. Singapore Airlines Scoot offshoot.
LCC's are not for me personally, but there are quite a few successful LCC's operating long-haul routes in moderate comfort which invalidate your comment IMHO.
30 inch pitch is not 28 inch pitch. LCC and ULCC are two different business models. It why Easy Jet and Ryanair don't fly from Europe to the US.
LCC and ULCC started out as separate models during their inception, but the line between the two has been fading for years. The industry has finally worked out that setting up an LCC or ULCC requires a lot of finesse of structure. When you look at the likes of UA (TED) and DL's (SONG), both failed and were shut down when their parent companies realized that applying 'corporate' labour and operational group costs to their...
LCC and ULCC started out as separate models during their inception, but the line between the two has been fading for years. The industry has finally worked out that setting up an LCC or ULCC requires a lot of finesse of structure. When you look at the likes of UA (TED) and DL's (SONG), both failed and were shut down when their parent companies realized that applying 'corporate' labour and operational group costs to their progenies simply didn't work. Both were extremely good carriers, but with parent carriers that failed to structure correctly.
JetBlue learnt that very quickly and eventually trended more 'middle' market. Even David Needleman has had a couple of different attempts at structures. Spirit OTOH is still learning. The models seem to work for Frontier and one or two other minor US carriers - but as costs escalate, their viability will become increasingly threatened.
Other more relevant points determining whether a carrier is ULCC or LCC include government regulation (ie. SQ is heavily regulated by government, whereas the UK & Ireland are much more flexible). Scope of where a LCC or ULCC can fly also play into this model.
In Jetstar's case, it *does* compete head-on with its other corporate member Qantas. Both carriers fly to Japan and to HNL, addressing quite different market segments. They also compete on domestic *and* regional markets (Australia and New Zealand). But, when Jetstar was set up, Qantas had a clear vision how Jetstar would compete on price, costs and service. It is one of the few that does work.
BTW, be cautious of quoting Ryanair's O'Leary. He HAS threatened previously to start trans Atlantic services.\ to the USA (pre COVID) and I would be wary of that.
Cost base is an issue, most if not all LCC long haul carriers need low wages, little to no taxes and alternate airports or terminals at their home base to survive, none of which exists in either Europe or USA. Also these airlines that still operate have differentiating factor in that they belong to a much stronger main line full fare carrier and are used in supplement not in competition of the routes they operate...
Cost base is an issue, most if not all LCC long haul carriers need low wages, little to no taxes and alternate airports or terminals at their home base to survive, none of which exists in either Europe or USA. Also these airlines that still operate have differentiating factor in that they belong to a much stronger main line full fare carrier and are used in supplement not in competition of the routes they operate out of. AirAsia is about the only standout that survives. In short Europeans and Americans are paid too much for these business model to survive there, less said about unions the better.
It’s not really longhaul from Iceland, which is too small to support more than one airline.
ULCCs do fine in Asia and Zipair is finding success TPAC. TATL, on the other hand, is a different story.
I can't wait for the third iteration of Wow/Play. This one should be named: Oof
That’s three budget carriers going belly-up in 3 months. The difference is that unlike Singapore’s Jetstar Asia in July, and Wizz Air Abu Dhabi in August, this was a fully independent airline and not a subsidiary of a larger group (Qantas and Wizz) — and indeed most recent LCC shutdowns have been like this: Viva Air, Go First, MYAirline, Bonza, etc.
BONZA was NOT independent. It was owned and and financed by a MIAMI Florida, USA organization called 777Partners - the same group that own(ed) Flair Airlines in Canada. BONZA was also required by the liquidators to refund all tickets for outstanding / not completed travel.
Also, Jetstar Asia did NOT go "belly-up". It was legally shut down by the Qantas / Jetstar Group and the fleet repatriated from SIN to Jetstar Australia. From the QF...
BONZA was NOT independent. It was owned and and financed by a MIAMI Florida, USA organization called 777Partners - the same group that own(ed) Flair Airlines in Canada. BONZA was also required by the liquidators to refund all tickets for outstanding / not completed travel.
Also, Jetstar Asia did NOT go "belly-up". It was legally shut down by the Qantas / Jetstar Group and the fleet repatriated from SIN to Jetstar Australia. From the QF Group website, see:
https://www.qantas.com/agencyconnect/au/en/agency-news/agency-news-june-25/update-on-closure-of-jetstar-asia.html
Play: "We would like to start an airline"
Investors: "We're intrigued!"
P: "It would be the exact same business model as Wow!"
I: "Didn't Wow go spectacularly bankrupt?"
P: "Yes, but we've brought onboard several former Wow executives so they'll know exactly what not to do this time."
I: "Sounds terrific! Where do we sign?"
"When I first came here, this was all swamp. Other kings said I was daft to build a castle on a swamp, but I built it all the same, just to show them. It sank into the swamp. So I built a second one. That sank into the swamp. So I built a third. That burned down, fell over, then sank into the swamp. But the fourth one stayed up!"
:)
Ni!
They were horrible from a customer standpoint anyway. Nothing to do with losing money- they were just nasty. But, they were also tight-fisted which probably DID have to do with losing money. So, a double dip of disaster from the get go. Good riddance! And they cost me $2000, but best money I ever spent to see them fold. I’m raising a beer to their demise tonight!
But WN’s premium pivot is to partner with Icelandair which as you said does the exact same thing? Thank goodness I have the opportunity to spend $75k with chase so they can give me A list status and $500 to go to Europe via Iceland. A real winning combination.
Icelandair is a well established profitable company. The issue is that there isn’t enough market for a competitor in that space hence the failure of Wow and Play.
I’ve flown Icelandair a number of times in Saga Premium (their lounge BTW at KEF is one of my favorites in the world) and would gladly fly them again. Never would have flown Play
I wonder what colour they’ll select for the next incarnation? Maybe they can pick up some pre-painted yellow A320s at a knock down price?
"... and thanks customers for their understanding."
You steal my money and ask me to understand? Screw you!
more new generation A320NEO family aircraft hit the market
In other Low Cost Airline news, Indian carrier Spicejet is acquiring A340s to go into service in October.
How this trash of an airline still survives is beyond me. A subsidiary airline of this airline is literally run by a nepo child who has no experience in aviation
The ulcc model works well in highly price sensitive markets like India where vast majority will choose a carrier similar to Spirit over a full service one for a 1 to 2% lower cost. That's why Indian carriers like Jet and Kingfisher went belly up being premium full service
Sadly ... GAME OVER.
lol gotta love it: "regarding refunds, contact anyone but us"
scummy as hell
If they're broke, they can't refund money they don't have.
Except that customers are supposed to be paid back first in any bankruptcy, before creditors. I remember that's what happened when PanAm went bankrupt. My girlfriend at the time was waiting for a refund they owed her (long story) - but they went bankrupt before it was issued. There was an 800 number to call (I think it was the main Pan Am customer service line that had been in use for years), and they sorted it out and sent her a check.
Actually secured creditors get paid before unsecured creditors or equity holders. Passengers could take a haircut on this. Credit card companies won’t simply pay them back unless they held funds in escrow that would have gone to Play. Even then a bankruptcy court may allocate those funds to secured creditors.
Sorry this isn’t about what is “fair” it follows established bankruptcy law
Next shoe to drop will be Spirit with more people losing...
Actually secured creditors get paid before unsecured creditors or equity holders. Passengers could take a haircut on this. Credit card companies won’t simply pay them back unless they held funds in escrow that would have gone to Play. Even then a bankruptcy court may allocate those funds to secured creditors.
Sorry this isn’t about what is “fair” it follows established bankruptcy law
Next shoe to drop will be Spirit with more people losing credits or prepaid ticket money.