Icelandic low-cost carrier PLAY Airlines announced its bankruptcy on Monday, September 29, following a sustained underperformance since the pandemic, driven by low sales and internal changes within the company. In Reykjavik, the capital of Iceland, several Portuguese nationals were stranded among the thousands of passengers without flights, according to DN, and approximately 500 airline employees lost their jobs.

In a statement, the company recommends that passengers seek flights with other airlines, "which may offer special 'rescue fares', taking into account the circumstances." However, Icelandair, its main competitor, points out that it is currently not offering special prices for these passengers, and is, however, "actively working to increase the availability of routes previously operated by PLAY."

Refunds must be submitted to the bank if payment was made by credit card, or to the travel agency if tickets were purchased there or are part of a package (flight + accommodation or services), according to a report by Expresso.

The airline was the only airline operating flights between the Icelandic capital and the airports of Porto, Faro, and Funchal, so currently, travel to Iceland is only possible from Lisbon.

This is the second time this phenomenon has occurred in Iceland in six years. PLAY Airlines began operating in 2021, founded by two managers of Wow Air, an Icelandic low-cost carrier that, in 2019, was also forced to cease flights after facing economic problems. Icelandair, currently the only airline operating flights between Portugal and Iceland, also considered purchasing Wow Air in 2019, but later backed out.

"PLAY tried to replicate Wow Air by connecting secondary cities in Europe to the United States, but the market is limited and low-yielding," aviation analyst Sean Moulton explained to The Independent. "Although they tried to shift strategy by focusing on point-to-point routes to leisure destinations, the Icelandic population is small, and any airline would struggle to handle it alone."