In a dramatic move, Icelandic low-fare carrier PLAY has announced the immediate cessation of operations, effective today, with all flights cancelled, leaving thousands of passengers stranded and approximately 400 employees facing job losses.
The airline announced the news on its website this morning, saying: “We kindly advise you to check flights with other airlines. Some carriers may offer special ‘rescue fares’ considering the circumstances.”
The news came as a surprise to industry insiders and, in a statement released on Monday morning, the company’s board cited a a number of reasons for the decision, including a history of weaker-than-expected financial performance, a recent sharp decline in ticket sales and “discord” among staff.
“The company’s operations have long been worse than hoped, ticket sales have not gone well in recent weeks and months following negative media coverage of its operations, and there has been discord among some of the company’s staff because of changes in its policy,” the board said
In an interview with LARA earlier this year, PLAY CEO Einar Örn Ólafsson said the airline had pivoted its business model, moving away from its competitive transatlantic hub-and-spoke model to focus on shorter, leisure-driven routes in Southern Europe.
However, the board said that these changes came too late, and were not sufficient to overcome the airline’s “deep-seated difficulties” that had accumulated over time.
“Great hopes were tied to the changed business model of the company, which was introduced last autumn and at the time gave considerable grounds for optimism. Unfortunately, it is now clear that those changes cannot deliver results sufficient to resolve the deep-seated difficulties of the company which have accumulated. In hindsight, those changes ought to have been implemented earlier,” the board said.
In a pessimistic tone indicating that no rescue plan was likely, the statement continued: “It is clear that thousands of passengers must reorganise their return journeys, about 400 people will lose their jobs, and the company’s partners will suffer losses.
“On this occasion the board and managers of PLAY emphasise that everything was tried so that the outcome would be different. This decision is by far the most grievous in the situation and it is only taken in light of the fact that other ways were deemed exhausted. The board offers its sincere apologies to all those who suffer negative consequences because of this outcome.”
