Into sudden interruption of the operation of-her proceeded on Monday the Icelandic airline company low cost Play Airlines, leaving trapped thousands passengers of-her and bringing into unemployment 400 workers.
The Play Airlines “pulled the cable” while she-planned the restructuring of-her into provider that specialized in flights charter and leisure, something that now may be cancelled.
The reason of the destruction that she-suffered was the low sales of tickets.
The Play Airlines was founded the 2021 as successor, in a way, of-the also failed airline company low cost Wow Air. Initially, the company intended to transport travelers between Europe and North America with hub in Reykjavik, like the bigger airline company of Iceland, the Icelandair, however she-failed.
The autumn of 2024, the business model of-her was revised. The transatlantic flights were reduced significantly and replaced by European routes and flights toward the Canary Islands. In the USA, the airline company served now only three airports: the New York Stewart (SWF), the Boston Logan (BOS) and the Baltimore-Washington (BWI).
In the framework of this restructuring, the Play conceded the Icelandic Air Operator Certificate (AOC) and the operational functions of-her were transferred to subsidiary of-her in Malta, while the functions back-office were transferred in Malta and Lithuania.
According to the Airdata News, thousands travelers have been trapped because of the suspension of the flights of the air-carrier. The Icelandic Authority of Consumer Protection has already issued recommendations concerning the way in which the customers of-her can claim their rights, especially based on the Regulation of the EU for the Rights of Passengers in the Air-transports.
The PLAY offered affordable prices in flights from the North America with the Europe using the Reykjavik as hub. From the start of the operation of-her in June of 2021, she-had increased the fleet of aircraft into 10 from the family of A320neo.
- Additional elements from Dimitris Stathopoulos
The connection with Athens
Although the PLAY was mainly known for the transatlantic of-her flights between United States and Europe, the Greek market had been included strategically in the network of-her as important destination of leisure of the South Europe.
In June of 2023, the company inaugurated direct regular flights between Reykjavik and Athens, a move that was characterized as historical milestone for the air relations of the two countries. The route was included in the strategy “fly connect” of the company, facilitating passengers mainly from American cities such as the Boston and the Baltimore to travel toward the Greek capital with one stop in Iceland.
The Athens functioned simultaneously as gate of entry for popular Greek destinations such as the Santorini, the Mykonos, the Crete and the Rhodes. The demand for the specific route had exceeded the initial expectations, with result the PLAY to extend the flights toward Athens until the January of 2024.
Although the flights toward the Greek capital had been completed before the final bankruptcy, the withdrawal of the PLAY from the market reduces the competition in the routes of leisure that connect the South with the North Europe.
Three reasons of failure
The collapse of the PLAY was not unpredictable. The company adopted the same business model with the predecessor of-her, WOW Air, using the Reykjavik as transatlantic hub with extremely low fares. The model this failed for three critical reasons:
Low revenues, high cost. Despite the high coefficients of load of the flights, the revenues per passenger were extremely low and did not manage to cover the high operational costs, especially amid the increases in the prices of fuels.
Delayed strategic decisions. The company presented significant operational losses, that reached the 35.2 million dollars the 2023. Although the administration recognized the need for turn into profitable European routes point-to-point, the changes these, as she-admitted, “should have been implemented earlier.”
Internal instability. The fall of the sales the last months, in combination with internal disagreements among workers concerning the strategic changes, worsened critically the situation. The final failure of the attempt of capital increase sealed definitively the lock-up.
Instructions for the passengers
Because of the bankruptcy, the immediate compensation based on the European Regulation is extremely improbable, since the claims of the passengers are transformed into credits in the bankrupt property of the company.
The specialists recommend to the affected passengers:
Reversal of bank transaction (chargeback). The most effective way of return of money is the direct communication with the bank or the issuer of the credit or debit card, asking reversal of the payment because of non provision of service.
Communication with travel agents. Those who bought the flight as part of organized trip (package flight and accommodation) through travel agent, must address the agent for alternative trip or full return of money.
Search of alternative flights. The PLAY on the part of-her, proposed to the passengers to search “rescue fares” from other airline companies. However, the main competitor, Icelandair, refused to offer special reduced fares, choosing instead to increase the capacity of-her in order to absorb the demand and to maximize the revenues of-her, consolidating further the dominance of-her in the Icelandic market.
The third failed bet
The bankruptcy of the PLAY constitutes the third failure of Icelandic airline company low cost inside in 13 years, confirming that the model of the ultra-low-cost transit hub in the geographically demanding Iceland remains fundamentally non viable for the international airline industry.
