Iceland’s PLAY Files for Bankruptcy After Shutdown

Icelandic low-cost carrier PLAY has filed for bankruptcy at Reykjavík District Court, just days after abruptly halting all flight operations on September 29, 2025. The court appointed a trustee on September 30, with a creditors’ meeting set for early October to determine the airline’s future.

The collapse comes only months after investors purchased ISK 2.8 billion (USD 23.1 million) in bonds at a steep 17.5% annual rate, hoping to stabilize the airline’s finances. Bondholders are now negotiating with lessors and executives to transfer assets to PLAY’s Maltese subsidiary, PLAY Europe, which remains operational.

According to ch-aviation data, PLAY’s six A320-200Ns on the Icelandic AOC are under leasing agreements—four from AerCap and two from CALC. Three AerCap aircraft were already ferried to Toulouse Francazal on September 30, while the remaining jets remain parked in Reykjavik Keflavik, Paris CDG, and London Stansted. The airline had previously shifted its three A321-200Ns and one A321-200NX to the Maltese registry, though those aircraft have also been ferried to France for storage or remain in maintenance.

PLAY Europe briefly continued flights on behalf of SkyUp MT after its parent’s shutdown, but tracking data indicates those services have now ceased.

Prime Minister Kristrún Frostadóttir expressed surprise at the timing of the shutdown, noting she expected operations to last through year-end. While acknowledging the financial strain, she emphasized that Iceland’s stronger economy would help absorb the fallout, limiting the broader impact compared to WOW air’s collapse in 2019.

Related News: https://airguide.info/category/air-travel-business/airline-finance/

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com