PLAY airlines has ceased operations, the Icelandic airline said on Monday (September 29).
The low-cost carrier has cancelled all flights and said it will be working with employees and authorities to wind down operations.
After its disappointing first quarter results, the airline's CEO Einar Orn Olafsson said the company would focus heavily on ACMI operations.
“We rest our future on this business of operating our aircraft for other operators,” Olafsson said during its first quarter earnings call. Four of the airline's 10 aircraft had been deployed for ACMI leasing with SkyUp Malta Airlines through 2027.
This strategy had proven contentious with staff, however, with the airline citing it as one of the reasons for its decision to cease operations.
“There has been discontent among some employees due to changes in the company's strategy. Great hopes had been pinned on the revised business model introduced last fall, which at the time was considered a source of considerable optimism,” the airline said in a statement.
PLAY also noted “negative media coverage” of its operations, poor ticket sales, and weaker than expected performance as key drivers.
The airline had reported a net loss of $15.3 million in the second quarter of 2025, widening from a $10 million loss a year prior, as well as a $26.8 million net loss in the previous quarter.
PLAY said it had “become clear” that its changes were unable to deliver “sufficient” results to overcome its “deep-rooted challenges”. The airline said: “In hindsight, the new business plan should have been implemented earlier.”
The airline's management and board said the decision is “the most painful one imaginable”.
The company had ceased all North American operations in June, freeing up two aircraft for the airline — one placed through 2026 and the other being marketed, the airline said in its second quarter results.
In July, PLAY secured $20 million of subscription commitments through a two-year convertible bond issuance.