Budget Icelandic airline PLAY will stop all flights to the U.S. in October, which will mark the end of its low-cost transatlantic routes. Instead, the company, which is preparing to be privatized and delisted from the Nasdaq Iceland exchange, will concentrate on connecting Icelandic travelers to sunny leisure destinations in Europe.

Transitioning Focus to European Destinations

PLAY launched in 2021 and began offering cheap one-stop flights across the Atlantic via Reykjavík’s Keflavík International Airport (KEF) the following year. It wasn’t a novel model.

Photo: Courtesy of PLAY

Flag carrier Icelandair began offering stopover flights on the island nation in the 1960s to promote tourism. Around the turn of the millennium, new carrier Iceland Express started doing the same but at a fraction of the price, hoping American travelers would be willing to accept a layover in quirky Reykjavík to save hundreds on their airfares to Europe.

The Rise and Fall of Budget Carriers

Margins for low-cost airlines are always tight, but Iceland Express held out for a decade before being acquired by successor WOW Air. WOW Air expanded the model and, at its peak, flew to 17 North American cities. However, it too floundered and folded in early 2019.

Photo: PLAY Airbus A321neo. Courtesy of PLAY.

Just three years later, newcomer PLAY introduced its own flights from Iceland to the U.S., starting with Baltimore (BWI) and Boston (BOS). With tickets priced as low as $300 or less, it undercut competitor Icelandair and offered a similar no-frills flying experience to WOW.

Challenges and Strategic Changes

As with other budget carriers, some of the flights marketed as from major cities departed from airports on the outskirts of their metro areas. For example, PLAY’s New York City flights flew into Stewart International Airport in Newburgh, 60 miles north of Manhattan, and its Toronto flights flew into John C. Munro Hamilton International Airport, 40 miles southwest of Toronto.

Photo: Courtesy of PLAY

PLAY eventually expanded to five North American destinations, targeting vacationers and business people traveling across the Atlantic. However, it made consistent losses, most recently of $26.8 million in the first quarter of 2025.

Ending North American Operations

Late last year, PLAY began pivoting away from the transatlantic market. It slashed routes to Washington-Dulles (IAD) and Hamilton, Toronto (YHM). Now, it’s pulling out of North America entirely. In September and October, its three remaining U.S. destinations will cease operating:

Stewart International Airport, New York (SWF): to cease September 1, 2025\
Boston Logan International Airport (BOS): to cease September 15, 2025
Baltimore International Airport (BWI): to cease October 24, 2025

Future Directions for PLAY

Instead, PLAY will focus on connecting vacationing Icelanders to sunny destinations in Southern Europe, including Spanish and Portuguese islands, where demand and returns are stronger. While expanding its service to Southern Europe, PLAY will cut frequencies and destinations across Northern Europe. PLAY will retain four of its ten aircraft and lease the remaining six to other carriers.

Additionally, the company’s two largest shareholders—CEO Einar Örn Ólafsson and Vice Chairman Elías Skúli Skúlason—will take the company private. Listed on the Nasdaq Iceland, PLAY has seen its shares slump 97% since its debut.