Icelandair has emerged as the dominant carrier in the Icelandic market, now holding a 70% market share following the sudden collapse of low-cost rival Play. Before ceasing operations, Play had controlled about 19% of the market and expected that figure to drop further to around 8% in the coming months. Play’s exit has immediate consequences for travelers. Of the 21 destinations the airline served this summer, nine will lose direct service from Iceland, including the ever-popular Tenerife route — often called Iceland’s “unofficial colony” — leaving Icelandair as the primary operator alongside occasional charters. Airport operator Isavia confirmed it is already in talks with foreign airlines to take over some of Play’s former routes, though new services are unlikely before next summer. The collapse has left Icelandair as the country’s undisputed flag carrier, but the long-term picture may change if international airlines step in to fill the gap.
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