Financial Troubles and Labor Conflicts Lead to Sudden Halt on September 29, 2025
The Icelandic low-cost carrier PLAY Airlines announced on Monday, September 29, 2025, that it is closing all operations with immediate effect. The airline said the decision was caused by financial problems, weak ticket sales and internal labor disputes. All scheduled flights were cancelled, including the weekly Tuesday route between Madeira and Iceland.
Weekly Madeira–Iceland Route Began in October 2024 With Direct Connections
PLAY launched the Madeira connection less than a year ago, with its first direct flight from Reykjavík to Madeira on October 15, 2024. The service operated once a week, every Tuesday. It was the only direct air link between the Portuguese island and Iceland, offering tourists and residents a new travel option until its sudden cancellation.
Passengers Offered Refunds and “Rescue Fares” Through European Carriers
On its website, PLAY informed passengers that they could request refunds for unused tickets. The company explained that travelers who purchased flights with a payment card or through travel agencies in the European Economic Area (EEA) may also have specific protections. Some carriers may provide “rescue fares” to help stranded customers reach their destinations. According to EU air passenger rules, claims in the case of bankruptcy must be made to the appointed administrator.
Refunds and Passenger Rights According to Play Airlines Website
If you purchased your ticket with a payment card, please contact your card issuer regarding a refund.
If you booked your ticket as part of a package (flight + accommodation or services) through a travel agency in the EEA, please contact your travel agent for assistance.
Some rights may also apply under EU Air Passenger regulations. In case of bankruptcy, claims should be directed to the appointed administrator.
Airline Expresses Regret While Customers Face Uncertainty Over Claims
In a short message to passengers, PLAY stated:
We are deeply sorry for the disruption this causes and thank you for your understanding.
While the company acknowledged the disruption, travelers are now left to navigate refund processes and possible claims under European law. The closure brings to an end a brief but notable air connection that linked Madeira directly to Iceland for less than a year.
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