Exceptionally cheap flights to Europe with a stop in Iceland are suddenly a thing of the past, as budget carrier Fly Play ceased all operations on September 29. According to the New York Times, the move immediately affected approximately 1,750 fliers, with a further 18,000 impacted due to having booked trips that now won’t happen. About half of those passengers were headed back home, the Times reported, citing an Iceland infrastructure ministry spokesman.
Bloomberg has the backstory plus the grim outlook:
The company was the successor to Wow Air…which shut down in 2019 over a lack of financing and high costs, and even employed some of the same executives. Now, the no-frills business model of flying passengers from Europe to America with a stopover near Reykjavik may be disappearing.
The no-frills market is generally under pressure. In August, Spirit Airlines declared a second bankruptcy in a year. But the Icelandic layover route is suffering from another problem: volcanic eruptions discouraging tourists from visiting.
A new era for Iceland’s volcanoes
The Times reported on Iceland’s volcanic difficulties and tourism downturn last year, noting the ripple effect that more eruptions were having on the bookings of both Icelandair, the national carrier, and Play. According to the BBC, the country, long known for geological drama, is entering what could be a more active volcanic period:
Iceland…sits on the boundary between the Eurasian and North America tectonic plates. These plates are very slowly pulling apart from each other, creating a space for hot molten rock – or magma – to flow up….There are more than 100 volcanoes across Iceland and more than 30 are currently active.
Of course, Play had plenty of difficulties without lava flows scaring off visitors to Iceland. In a statement, the airline detailed various woes, including poor ticket sales it blamed on negative media coverage, “weaker than expected” performance, and employee discontent after “changes in the company’s strategy.”
Not exactly a great experience
Bloomberg’s reporting made the whole Icelandic-stopover experience sound rather unpleasant. Keflavik International Airport and its single terminal were characterized as “dated and dark” by Paul Charles, a travel marketing consultant. “It is the end of Iceland being a strategic pit stop,” Charles told Bloomberg. “They simply can’t charge low-enough prices to attract people.”
At least Play didn’t sugarcoat the bad news. It said that around 400 people would be thrown out of work and that the company’s partners would suffer losses. It added that the “decision is the most painful one imaginable in this situation and has only been taken because all other options were deemed exhausted.” It excoriated itself for not acting sooner to fix it business. But it might have been too late regardless. A trend is clearly emerging: while no-frills airlines had a good run, it seems that their innovations have been absorbed by established carriers, and fliers are simply not as willing to support ultra-low-cost operators.
