By Contributor,Michael Goldstein,Nicolas Economou

Copyright forbes

Airbus A320neo aircraft of Play airlines landing and taxiing at Polderbaan runway at Amsterdam Schiphol Airport AMS EHAM in the Netherlands. The plane ‘s arrival is from Reykjavik KEF International airport in Iceland. Fly Play is an Icelandic low cost airline carrier with a fleet of 10 Airbus neo airliners. 30 March 2024 (Photo by Nicolas Economou/NurPhoto via Getty Images)
NurPhoto via Getty Images

Low-fare airlines come and go.

PLAY airlines, that as recently as 2023 flew one million Americans to Iceland and often on to Europe, has folded after four years in operation. Some 400 employees will lose their jobs.

Causes cited included poor ticket sales, internal conflicts between employees and management, negative media coverage, and issues with the PLAY network in its major market, North America. The fate of its fleet of ten Airbus A3 20neo aircraft is unclear.

The low-cost, long-haul airline business is unforgiving. While recent start-ups like Norse Atlantic, Breeze and JSX have been promising so far, the airline world is littered with the carcasses of carriers that tried to fly millions of people thousands of miles at affordable prices.

PLAY was initially successful, attracting hundreds of thousands of passengers and achieving an 87% load factors. The start-up aggressively offered service to Iceland and 30 European destinations, including Berlin, Paris, Venice, Warsaw, Prague, Stockholm, London, Madrid and Lisbon. The airline flew from Baltimore/Washington (BWI), Boston Logan (BOS), New York Stewart International Airport (SWF), Washington Dulles (IAD), and Toronto (YHM).

When I interviewed him in 2023, PLAY CEO Birgir Jónsson pointed to the carrier’s “hub-and-spoke model that connects passengers between North America, Iceland, and Europe.” With its strategic location between North America and Europe, Iceland is an ideal stopover point for relatively short flights between the two continents. Iceland is also a destination in itself.

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Birgir Jonsson, chief executive officer of Play Air, left, stands with aircrew ahead of the airline’s inaugural flight to London Stansted airport, from Keflavik International Airport, near Reykjavik, Iceland, on Thursday, June 24, 2021. Iceland’s new airline startup Play Air seeks to capitalize on the island’s recovery from the coronavirus crisis and inclusion on the U.K.’s green list for quarantine-free travel. Photographer: Sigga Ella/Bloomberg
© 2021 Bloomberg Finance LP

Unfortunately, PLAY is not the first airline to fail with this business model. WOW Air, which also operated out of Reykjavik, carried hundreds of thousands of passengers thanks to its extremely low fares between Europe and North America via Iceland. After seven years of operation, WOW collapsed in March, 2019 due to financial losses, rising fuel costs and an inability get funding or merge with Icelandair. The sudden collapse stranded thousands of passengers worldwide, although the collapse of Thomas Cook six months later left hundreds of thousands in the lurch.

PLAY went out with more of a whimper than a bang, as the airline had turned its focus to Europe rather than the summer international traffic. The airline had been cutting back on transatlantic operations for more than six months, dropping flights from Canada and from the Washington, DC area, and announcing in June it would end all of its once-extensive US routes.

The company tried to focus on the European market. It also offered its planes and personnel for wet leases to other carriers rather than its own scheduled operations.

News of PLAY’s struggles inevitably got around. When the carrier failed, PLAY blamed “negative media coverage of its operations” as well as “discontent among some employees due to changes in the company’s strategy.”

A relatively small number of passengers ended up stranded, not just because PLAY had only 10 aircraft each with about 180seats each, but also because ticket sales were weak for months.

Still, the carrier was still operating flights, and some people were in fact stranded when PLAY’s board of directors made the decision to end operations. All remaining flights were cancelled, and PLAY had the chutzpah to tell stranded passengers “to check flights with other airlines, [as] some may offer special ‘rescue fares’ considering the circumstances.”

Passengers left stranded after the collapse of British travel firm Thomas Cook remain at Punta Cana’s international airport, in the Dominican Republic, on September 23, 2019. British travel firm Thomas Cook, both a tour operator and an airline, collapsed Monday leaving hundreds of thousands of holidaymakers stranded worldwide and sparking the UK’s biggest repatriation since World War II. (Photo credit ERIKA SANTELICES/AFP via Getty Images)
AFP via Getty Images

Equally helpful, the suddenly defunct airline suggested passengers talk to tour operators or credit card customer service about a possible refund. Money, clearly, wasn’t going to be returned to passengers from PLAY.

I profiled PLAY in July of 2023. Looking back, some of PLAY’s challenges were already apparent. Rather than fly out of international airports like JFK or Newark (EWR), New York-to-Iceland (and on to Europe) flights were flown from Stewart Airport, a two hour bus ride from Manhattan. This was the same strategy followed by fellow low-cost carrier Norwegian Airlines for its 737 flights to Western Europe.

After initial massive growth, (it was once the largest foreign carrier operating in the NY area) Norwegian almost collapsed for various reasons, including COVID and the grounding of all Boeing 737MAX aircraft. Norwegian went through a severe restructuring in 2021, selling off its 787 Dreamliners and focusing on European operations only. Today, Norwegian Air Shuttle is ranked as one of the top low-cost airlines in Europe, with AirAdvisor noting it is in the top three for customer reputation.

Unfortunately, customer reputation for PLAY was not a strength. In September 2023, Forbes reader robtrim commented on my story about PLAY, “Play has non-existent customer service. They are a joke.”

Running any airline is hard, as the sea of red ink in Q1 2025 from US leaders like Southwest, American and Alaska show. And these are long established airlines with brand recognition, and financial resources, including cash, aircraft, landing slots and frequent flyer programs literally worth billions of dollars.

Warren Buffett, a longtime critic of the airlines, famously said if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors and future stockholders a huge favor by shooting Orville down.

A Norwegian (Vilhelm Bjerknes Livery) Boeing 737-8JP lands at Zaventem International Airport in Brussels, Belgium, on June 27, 2025. (Photo by Jonathan Raa/NurPhoto via Getty Images)
NurPhoto via Getty Images

Profitability is hard for even well-stablished carriers, with unpredictable factors like fuel costs, pilot shortages, the current government shut-down and of course the COVID grounding of thousands of planes all weighing heavily.

Start-up low fare airlines start out with several strikes against them, such as financing, brand awareness or lack of same, finding pilots and competition from existing airlines. Expanding too quickly often is a contributing cause for failure, yet if start-ups don’t expand fast they won’t develop brand awareness or market share.

Still, bold entrepreneurs will continue to ignore Buffett’s gloomy (if accurate) words about the business and launch new airline start-ups. Studying the failures of carriers like PLAY may help create more robust and successful airline entries.

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