Icelandic low-cost carrier PLAY (OG) has ceased operations with immediate effect. The airline’s board said all flights are canceled and it will work with authorities and employees to wind the company down.

What happened?

In a stock-exchange disclosure on September 29, 2025, PLAY said it is terminating operations after a period of heavy losses and weak demand. Icelandic media report the shutdown was triggered by prolonged underperformance and a sharp drop in recent ticket sales.

If you have a PLAY ticket — what to do now

1. Do not go to the airport unless another airline has rebooked you and confirmed your new flight in writing.
2. Collect documentation: booking confirmations, receipts, screenshots of any messages from PLAY.
3. Card payments: contact your card issuer and request a chargeback for “services not provided.” If you booked via an online travel agency, start the process with them as well.
4. EU/EEA passenger rights (Regulation EC 261/2004): Iceland participates in the EU/EEA passenger-rights framework. In normal cancellations, airlines must provide duty of care and compensation. In practice, when an airline stops trading, claims may need to go through the administrator/insurer and are often harder to recover—keep all receipts for meals, hotels, and alternative transport.
5. Travel insurance: If your policy includes airline insolvency/supplier failure, file a claim immediately.
6. Rebook yourself if you must travel: Search alternatives via Keflavík (KEF)—primarily Icelandair—or route via European hubs. Keep proof of extra costs for later claims.

What routes and passengers are affected?

All remaining PLAY routes are impacted. Earlier in 2025 the airline had already announced plans to withdraw from North America and scale back parts of its network, but today’s decision cancels every flight with immediate effect.

Background: how PLAY got here

PLAY launched commercial flights in 2021 as an Iceland-based low-cost challenger, operating a single-type Airbus A320neo/A321neo fleet via Keflavík (KEF). Despite rapid growth and a young fleet, the airline struggled to achieve sustained profitability. Local media highlight heavy losses and weak late-summer sales as proximate causes of the shutdown.

FAQ

Will PLAY rebook me on another airline?
There’s no indication of systematic rebooking. Assume no and arrange your own travel if time-critical. Watch for any administrator updates.

Can I get EU261 compensation?
EU261 rights apply to flights from the EEA or operated by an EEA carrier. However, when an airline ceases trading, payouts can be uncertain. Prioritize chargebacks and insurance, then submit claims to the administrator if instructed.

What about future bookings?
Treat all future PLAY tickets as canceled unless an official notice says otherwise. Contact your card issuer/OTA now.

Sources: Yahoo Finance / RÚV / Iceland Monitor