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European Airline Suspends All Flights to the U.S.

European Airline Suspends All Flights to the U.S.
REYKJAVÍK — PLAY Airlines, the Icelandic low-cost carrier, has announced it will suspend all flights to the United States starting October 2025. This decision marks a significant strategic withdrawal from the North American market amid a shareholder-led takeover and plans to delist from the Nasdaq Iceland exchange.
Strategic Shift Amid Market Challenges
PLAY currently operates transatlantic routes from Keflavík International Airport to several U.S. destinations, including New York’s JFK and Washington, D.C.’s IAD airports. The airline’s decision to exit the U.S. market reflects mounting operational challenges, including rising costs, ongoing supply chain disruptions, and weakening demand, particularly in North America. These difficulties are part of a broader trend affecting transatlantic carriers, with airlines such as Air Canada recently reducing their transborder services amid economic uncertainty. Industry analysts highlight subdued GDP growth forecasts in both the U.S. and Europe, signaling continued softness in demand for North Atlantic air travel.
In response, PLAY is restructuring its business model to focus on European leisure destinations and aircraft leasing. Led by CEO Einar Örn Ólafsson and Vice Chairman Elías Skúli Skúlason, the restructuring involves a full takeover, delisting, and capital reorganization. The acquisition values PLAY at ISK 1 per share, with shareholders offered either cash or shares in the new private entity. A minimum capital injection of USD 20 million is planned, with over one-third already secured.
Operational Changes and Future Focus
The airline will completely terminate all U.S. routes by October 2025. Specific terminations include Stewart International Airport (SWF) after September 1, 2025, Boston Logan International Airport (BOS) after September 15, 2025, and Baltimore/Washington International Airport (BWI) after October 24, 2025. The exit from Baltimore/Washington International, which has experienced several airline departures in recent years, underscores shifting strategies and competitive pressures in the U.S. Northeast corridor.
PLAY plans to expand its leisure-focused flights from Iceland to Southern Europe while reducing frequency and destinations in Northern Europe. The airline will continue operating four aircraft based in Iceland and will lease six aircraft to other carriers under ACMI (Aircraft, Crew, Maintenance, and Insurance) agreements. Additionally, PLAY intends to grow its operational offices in Malta and Lithuania.
A key component of the restructuring is the transfer of PLAY’s operational certificate from Iceland to Malta. This move aims to leverage regulatory and financial advantages, particularly in the aircraft leasing sector, which is becoming a core focus for the airline.
Maintaining Brand Identity Amid Transition
Despite these significant operational changes, PLAY will retain its distinctive red livery, and Icelandic flight crews will continue under existing labor agreements. The airline seeks to maintain its consumer-focused brand in Iceland by offering competitive fares to popular European destinations while generating steady revenue through its expanded aircraft leasing activities.
As economic headwinds and declining demand reshape the transatlantic aviation market, PLAY’s withdrawal from the U.S. highlights the broader challenges confronting airlines on both sides of the Atlantic.

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