PLAY (Iceland) (OG, Reykjavik Keflavik) has filed for bankruptcy at Reykjavík District Court, shortly after suddenly halting its flight operations on September 29, 2025. Innherji, a local business news website, reported that bondholders have been trying to relocate the carrier's entire fleet to still-active Maltese subsidiary PLAY Europe (FPE, Malta International), but at least some of them appear to have been repossessed.

The court appointed a trustee on September 30, following a hearing launching the airline's bankruptcy. The Icelandic carrier plans to hold a meeting with creditors in the first week of October.

The representatives of the investors, who bought bonds worth ISK2.8 billion Icelandic króna (USD23.1 million) priced at 17.5% per year earlier this year, are now in talks with the executives and lessors concerning the transfer of the six A320-200Ns remaining on the Icelandic AOC. ch-aviation data shows that four are leased from AerCap and two from CALC.

While initial reports have suggested that the aircraft could be transferred to the Maltese entity even before the first meeting of creditors takes place, ch-aviation research shows that three AerCap-owned A320-200Ns, TF-PPD (msn 7576), TF-PPE (msn 11123), and TF-PPF (msn 11344), were ferried to Toulouse Francazal on September 30. The other three A320s remain parked, one each at Reykjavik Keflavik, Paris CDG, and London Stansted, where they were when the grounding was announced.

The airline previously transferred its three A321-200Ns and one A321-200NX to PLAY Europe. The Maltese subsidiary, which is wholly owned by the Icelandic carrier, continued operations on behalf of SkyUp MT on September 30, a day after its parent stopped all flights. However, ADS-B data shows that all three of its active aircraft (two A321-200Ns and one A321-200NX) were ferried to Toulouse Francazal on September 30. The fourth aircraft, A321-200N 9H-PED (msn 7945), remains under maintenance at Ostrava and has never operated under its Maltese registration.

Meanwhile, Prime Minister Kristrún Frostadóttir told local media that the airline's decision to suspend all flight operations had surprised her. Even though she was aware of PLAY's strained financial situation, she expected the carrier to continue until at least the end of the year. She added, however, that given the airline's recent downsizing and the overall strength of the Icelandic economy, the collapse will have a less detrimental effect on the country than that of WOW air in March 2019.