Given its location between the Greenland Sea and the North Atlantic Ocean, the island country of Iceland is particularly well-positioned to serve as a hub for low-cost carriers taking travelers from the East Coast of North America to Europe.
While the flag carrier Icelandair has been flying since the 1930s, the last decade has brought with it the launch of several new low-cost airlines like Wow Air — the ultra-low-cost airline was in service between 2012 and 2019 — and Play Airlines.
The latter Reykjavik-based airline launched in 2019 and after six years of shuttling travelers to both Iceland and numerous European capitals folded unexpectedly at the end of September.
Airline shuts down, tells travelers to “check flights with other airlines”
“Fly PLAY has ceased operations, and all flights have been cancelled,” the airline posted on its website on Sept. 29. “We kindly advise you to check flights with other airlines. Some carriers may offer special ‘rescue fares’ considering the circumstances.”
In an expanded statement, the airline said that the decision to shut down came after multiple quarters sustained losses and ticket sales that did not bring in the necessary funds. Back in June, the airline had announced plans to cut all flights between the U.S. and Europe by October 2025.
Related: Spirit Airlines to cancel all flights to two more US airports, refunds available
The initial plan was to suspend flights out of New York Stewart International Airport (SWF) and Boston Logan International Airport (BOS) by the end of September and run flights from Baltimore/Washington International Thurgood Marshall Airport (BWI) until October 24. The shutdown came especially unexpectedly because, up until a few weeks ago, airline leadership was telling customers and investors that it would instead redirect its aircraft to flights between various European cities.
“We are not changing who we are — we are simply focusing on what works,” Play CEO Einar Örn Ólafsson said in June 2025.
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Your Play Airlines flight was canceled? Here is how you may be able to get some money back
The shutdown affects 400 Play employees who are suddenly left without jobs and thousands of travelers with booked flights having to suddenly look for alternative transportation.
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While a bankruptcy is yet to be formally announced, the statement issued by the airline makes it clear that it is not in a state to provide refunds — travelers have been told to look at what is being offered by other airlines while those who booked with a credit card with insurance protection may be able to get they money back through that route.
Among the people affected by the cancelations is the Icelandic alternative rock band Oyama. The six members of the band had booked tickets between Reykjavik and London to prepare for their London tour starting later in 2026 but found themselves having to put off the trip after the flight was canceled with a day’s notice; due to the rush of travelers looking for last-minute alternative transportation, putting off any non-urgent travel can protect passengers from paying fares that can spike as much as 10 times their market worth.
While Play Airlines mentioned that travelers may be able to get rescue fares on other airlines, no carrier has yet announced that this is something they are offering to stranded travelers.
Related: United Airlines CEO gives stark warning on Olympic Games
