Icelandic low-cost carrier Play has ceased operations, blaming a “weaker-than-expected” performance in recent months that was exacerbated by “negative media coverage” of its operations.
The development comes before Play was able to fully implement its new network strategy of dropping transatlantic connections to North America, instead focusing on point-to-point leisure routes from Iceland using four of its 10 Airbus A320neo-family aircraft. The remaining six twinjets were being wet leased-out as part of a new hybrid business model that saw it drop its Icelandic AOC and instead operate using a Maltese one.
But with profitability elusive and ticket sales “poor” in recent weeks, Play’s board announced on 29 September that it was ceasing operations immediately and would “work closely with authorities and employees to implement necessary measures” to wind down operations.
“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 board states.
“Unfortunately, it has now become clear that these changes cannot deliver results sufficient to overcome the company’s deep-rooted challenges that have built up over time.”
Alongside its complaint about “negative media coverage”, Play also cites “discontent among some employees due to changes in the company’s strategy” in recent weeks.
Some 400 jobs will be lost, Play says.
Keflavik International airport-based Play commenced operations in 2021, promising to avoid the mistakes of defunct predecessor Wow Air by focusing on narrowbody operations and slower fleet growth.
But as it struggled to make money, main rival Icelandair complained of “irrational” competition in Iceland in the post-Covid era, which was driving down fares and weighing on its earnings. The fortunes of both Icelandic carriers were also not helped by seismic activity in Iceland in recent years, international coverage of which hit demand for leisure travel to the island.
A proposal for senior management figures to take over Play was rejected in July this year, after shareholders indicated a preference for the airline to remain listed on the stock exchange.
