In 2021, we saw the launch of PLAY Airlines, an ultra low cost carrier in Iceland that intended to use Reykjavik (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.
While we’ve already seen PLAY update its business model a bit, we’re now seeing the biggest changes to date. There are plans for the airline to discontinue United States flights altogether, and even for the company to be taken private.
In this post:
PLAY ending flights to the United States
PLAY has updated its route network, and has removed all United States flights from its schedule as of the winter season. Currently, the airline flies to Baltimore (BWI), Boston (BOS), and New York Stewart (SWF), and all of those routes will be ending in September and October 2025.
The airline previously had a significantly larger network in North America, but those flights have been unprofitable since launch. So while we’ve seen reductions, the airline is finally pulling the plug on this service altogether.
Since late 2024, the airline has been pursuing the strategy of increasingly focusing on strong leisure markets out of Iceland, while deemphasizing its business of connecting passengers between North America and Europe. So this is a logical extension of that strategy. For context, below is what PLAY’s current route network looks like.
PLAY to be taken private, with new strategy
Separate from discontinuing flights to the United States, PLAY has announced that two of its largest shareholders, including the company’s CEO and Vice Chairman, intend to take the company private, with a voluntary takeover of all shares in the company. PLAY’s stock is down nearly 97% since going public, and it’s down even more compared to its high.
The offer is for 1.0 ISK per share, compared to the current price of 0.8 ISK per share. Given the company’s bleak outlook, that’s probably going to be as good as it gets.
What’s the strategy, with the company going private? The plan is to continue to have 10 aircraft in the PLAY fleet, but to utilize them differently:
- PLAY would fly four planes out of Keflavik, specifically to leisure destinations with high demand, including markets with a lot of VFR (visiting friends and relatives) traffic
- PLAY would dedicate six aircraft to a new Malta-based wet lease venture, whereby these aircraft would be leased out to other airlines
Below is part of the presentation about the changes to the business model. There’s some interesting and somewhat questionable claims here, if you ask me (in particular, about the external factors that have impacted PLAY’s lack of success)…
These changes to PLAY’s business model make sense
PLAY pivoting to focusing on point-to-point leisure flying and becoming a wet lease operator makes perfect sense. I’m not sure it’ll make the airline hugely profitable, but at a minimum, it should help with reducing losses.
The thing that I can’t wrap my head around is why anyone thought the initial business model made sense in the first place. Why do I say that?
Well, 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 has been losing money since launch. This shouldn’t come as a surprise to anyone, since the company’s business model replicated WOW Air’s failed business model.
After years of losses, PLAY is finally giving up on competing in the transatlantic market, and is instead focusing on point-to-point leisure flying. There’s now also a proposal for the company to be privatized, and to lease out a majority of its fleet to other airlines.
What do you make of these updates at PLAY?
Nothing points to failure more than implementing a previously failed strategy employed by a bankrupt predecessor. Iceland Express, Wow Air, and now Play sought to go head-to-head with Icelandair by competing in the same markets but falling short. Instead of trying to serve gateways that were already well served by their major competitor, Play should have looked for alternative gateways with good potential and built new routes. And at a time when many (probably most)...
Nothing points to failure more than implementing a previously failed strategy employed by a bankrupt predecessor. Iceland Express, Wow Air, and now Play sought to go head-to-head with Icelandair by competing in the same markets but falling short. Instead of trying to serve gateways that were already well served by their major competitor, Play should have looked for alternative gateways with good potential and built new routes. And at a time when many (probably most) Europeans have no interest in visiting the United States, why did Play ignore Canada altogether? Play's North American (read: U.S.) routes have been grounded due to a lack of imagination on the part of the company's leadership.
I have flown PlAY many times and always felt safe and liked it. So sorry to see it go. Iceland will suffer with this change. Sorry for that. I hope it gets picked up by someone. Sad!
They must be adjusting the North American schedule due to the new threat posed by Global Airlines.
Well, better to hear this news in June than in the fall, Had two family members booked R/T on PLAY from BWI to KEF (Nonstop was a nice thing) in December to see the Northern Lights. Thanks to OMAAT, I saw this post and quickly rebooked them on Icelandair, same route and in the end a few dollars less for same flights. Booked it immediately as I expect that the law of supply and demand...
Well, better to hear this news in June than in the fall, Had two family members booked R/T on PLAY from BWI to KEF (Nonstop was a nice thing) in December to see the Northern Lights. Thanks to OMAAT, I saw this post and quickly rebooked them on Icelandair, same route and in the end a few dollars less for same flights. Booked it immediately as I expect that the law of supply and demand may push Icelandair to raise its prices a bit.
That said, now I need to have Icelandair actually cancel our flight so I can get a refund on my AMEX GOLD.
Good luck, WOW left thousands stranded all over the world. I never heard passengers got reimbursed for flights that never happened.
Nonstop Y cash fares to Europe on full service airlines are dirt cheap post of the year.
Why connect on an LCC?
The fact is that when you add in hold luggage, any seat and basic drink/meals costs. These low cost carriers are no cheaper than legacy airlines value fares. Plus while I am happy to use Ryanair and ULCCs in Europe and will pay more to go direct rather than change planes (Ryanair/EZY isn’t always cheapest option), for longer haul I prefer a more premium experience. I actually like Icelandair and them retaining both US domestic...
The fact is that when you add in hold luggage, any seat and basic drink/meals costs. These low cost carriers are no cheaper than legacy airlines value fares. Plus while I am happy to use Ryanair and ULCCs in Europe and will pay more to go direct rather than change planes (Ryanair/EZY isn’t always cheapest option), for longer haul I prefer a more premium experience. I actually like Icelandair and them retaining both US domestic style business class and extra legroom economy seats, as well as tv screens seems to be the a better transatlantic model, so I get where they are coming from with external factors. But also for such a small national market respectively, one international carrier is probably enough.
Their fares wee always high for a low cost Trans-Aatlantic airline, so I wouldn't use them, a shame they didn't realize that they were uncompetitive.
This news is interesting juxtaposition to the rumor that Southwest could start international service to ..... Iceland ... on their own metal ...
I'm skeptical about this leisure strategy. Iceland's population is less than 400,000 people so relying on pure point-of-origin traffic is tricky. I'm not sure there is enough local demand year-round to support it. Play is smart to avoid competing with FI, but the best option is to be acquired by FI so they can add a leisure component with flow from its existing North American network.
They are only going to have 4 aircraft. Most services will be maybe twice a week. That's sustainable for the market size.
I think this leisure play is doomed as well. Iceland's population is less than 400,000 people so it will be difficult to sustain service anywhere without connecting traffic. They are smart to avoid competing head-to-head with FI on most routes, but this is still a difficult strategy. Seems the best option would be an acquisition by FI so it can have a leisure-focused subsidy that still gets flow from FI's North American network.
To say "However, they believed things would be different this time around." is a very superficial analysis. The replacement airlines have different capital structures and different sized fleets. Wow had 24 planes at its max, while Play only had 15. To assume these executives aren't learning from the mistakes they made is a bit presumptuous.
US carriers didn't make money for years, and now have sustainable business models. Based on Ben's logic, United should...
To say "However, they believed things would be different this time around." is a very superficial analysis. The replacement airlines have different capital structures and different sized fleets. Wow had 24 planes at its max, while Play only had 15. To assume these executives aren't learning from the mistakes they made is a bit presumptuous.
US carriers didn't make money for years, and now have sustainable business models. Based on Ben's logic, United should have liquidated after its first or second (or third, I lost count) bankruptcy.
Except that US carriers make the vast majority of their profits from credit card affiliations & leveraging their frequent flyer programs, not actually transporting pax, ironically !
Entirely predictable, but also sad. I flew them once and really enjoyed flying out of Stewart Airport rather than slogging through traffic to JFK or EWR. The flight was perfectly comfortable, and also left a bit earlier in the day than the competition (I hate redeyes in economy).
Sad for me - I had a wonderful flight with them from BOS/KEF in April and was looking forward to another.
Who knows what summer 2026 will look like but I suspect we’re going to see transatlantic flying drop even further below normal winter levels. I would be shocked if we don’t see cuts to existing schedules. I noticed EI cleverly announced DUB-CUN this winter and I assume that is because there will be less demand for DUB-MIA. Americans are still traveling in large numbers eastbound this summer but Europeans flying westbound is already down for peak season.
All I can say is WOW......
Ahhh.. don't PLAY with us !!
Well done to both of you
They're picking a bad week to make this decision. Surely US-bound travel from Europe is about to skyrocket.
Indeed, all those 'gringos' returning home after their vacays !