Budget airline play ends all flights to the US as competition rises
- Play airlines is set to stop flying to the United States by October 2025, ceasing operations to key cities such as New York, Boston, and Baltimore.
- The airline's transatlantic routes have been financially underperforming due to market saturation and heightened competition.
- This decision is part of a restructuring strategy aimed at targeting profitable leisure markets and adjusting operational models.
Iceland is facing significant changes in its aviation market as Play airlines, an Icelandic low-cost carrier, announced plans to terminate all of its flights to the United States. This decision is set to take effect in the autumn of 2025, with discontinuation dates planned for major destinations including New York City, Boston, and Baltimore. These changes come after Play's transatlantic service began in spring 2022 but has since struggled financially due in large part to an oversaturated market and increased competition from other carriers. The hub-and-spoke operational model, which Play used to connect flights between its main hub at Keflavík International Airport and various destinations, has proven to be less effective in the transatlantic market compared to direct routes in Europe. As a result, the financial performance of the airline has suffered, culminating in a reported loss of $20 million for 2024. The increased pressure on yields in the transatlantic market is further exacerbated by recent airspace restrictions faced by several European airlines, forcing them to reevaluate and restructure their offerings. Play will stop its flights to New York Stewart on September 1, 2025, followed by Boston Logan on September 15, and conclude with its final services to Baltimore/Washington on October 24, 2025. An executive restructuring has been proposed by Play’s CEO Einar Örn Ólafsson and Vice Chairman Elías Skúli Skúlasont, which includes a voluntary offer to acquire all outstanding shares in the airline. This restructuring aims to adapt the business model to a more profitable strategy focused on leisure and visiting friends and relatives (VFR) markets rather than the highly competitive transatlantic routes. In place of the discontinued routes, Play intends to shift focus towards flight operations to underserved sun destinations now targeted for new routes, such as Antalya, Faro, and Agadir. The airline is also looking to provide wet lease services, offering aircraft and crew to other airlines on a short-term basis to assist with scheduling gaps. If approved, the new strategic direction seeks to enhance the Icelandic aviation market by maintaining affordable fare options for both Icelanders and tourists. By discontinuing underperforming flights to the US, Play is aiming to stabilize its financial future while addressing the competitive landscape of transatlantic air travel.