AVGEEK
Why Airlines Fail: The WOW Air & PLAY Story
Birgir Jónsson examines the economics of Iceland’s transatlantic network, the different pressures on WOW Air and PLAY, and why cost discipline means little without financial resilience.
The conversation
Airlines can fill aircraft, expand a route map and secure favourable leases without necessarily building a business that can withstand the next shock.
In Episode 81 of The Indian AvGeek, Vishal Mehra speaks with Birgir Jónsson, former CEO of PLAY Airlines, deputy CEO of WOW Air and CEO of Iceland Express, about three approaches to Icelandic low-cost aviation. Their conversation turns on an easily overlooked distinction: a connecting network can make flights viable without producing the most valuable passengers.
Jónsson argues that the traffic an Icelandic airline most wants is often not the traveller passing through Keflavík between Europe and North America, but the leisure traveller flying to or from Iceland. Connecting itineraries use two flight sectors to sell one journey, while the local and destination markets can offer stronger margins. That makes the ambition to build a larger transatlantic network less straightforward than seat numbers suggest.
The histories of WOW and PLAY are not interchangeable. Jónsson discusses WOW’s move into widebody flying and the extra complexity it brought; he attributes much of PLAY’s difficulty to changing external conditions. He had left WOW years before its closure and stepped down from PLAY in 2024, before its final pivot and 2025 shutdown. His account of those later decisions is interpretation, not a claim to have witnessed them from inside.
The discussion ultimately returns to what scale cannot replace: a cost base that remains under control, capacity that can adapt to seasonality, sufficient liquidity and the confidence of lessors and suppliers. WOW’s short-lived Delhi route and eye-catching fares provide an India-specific test of the difference between marketing demand and financing an airline network.
Key Takeaways
- The passengers that fill a network are not always the passengers that pay for it. Jónsson divides Iceland’s traffic into residents travelling abroad, visitors travelling to Iceland and passengers connecting between Europe and North America. He considers the connecting flow useful for aircraft utilisation but generally less attractive in margin terms: two flight sectors support one customer journey and one set of ancillary sales.
- Seasonality rewards an airline that can contract as well as expand. At Iceland Express, flexible leased capacity allowed the operation to grow in summer and reduce flying in winter. Jónsson describes it as the profitable exception among the Icelandic airlines he worked for. That is his assessment of the business, not an independently audited comparison.
- WOW and PLAY expose different weaknesses—not one universal verdict on low-cost flying. Jónsson says WOW was moving from a damp-lease model towards its own operating certificate and aircraft during his 2014–late-2015 tenure. He had not heard plans for widebody long-haul flying then and thinks it began about two years later, without claiming to know when the decision was made. He credits low fuel costs, inexpensive aircraft and strong demand for WOW's early growth, but says widebodies added complexity as finances tightened. PLAY, in his account, faced different fuel-price and tourism-demand shocks; he discusses its later ACMI pivot retrospectively.
- A spectacular fare can validate the marketing, not the route. Discussing WOW’s Delhi launch, Jónsson treats ultra-low advertised fares as entry-level prices designed to win attention, with ancillary charges and higher-paying passengers needed to support actual revenue. He regards the India expansion as overreach for the airline at that stage, while explicitly not treating it as evidence that India was a weak aviation market.
- ACMI is a change of business model, not an automatic escape route. Jónsson distinguishes selling seats to travellers from leasing aircraft, crew, maintenance and insurance capacity to another airline. He interprets PLAY’s later move toward ACMI as an attempt to monetise favourable aircraft leases, but says it did not have time to complete that transition. He was no longer leading the company when the pivot took shape.
- Liquidity is also a form of trust. Jónsson argues that an airline needs both a low cost per available seat-kilometre and ready access to capital. His description of WOW’s final period illustrates how the loss of confidence among a lessor or supplier can set off a wider withdrawal of support, even while a carrier is attempting to shrink. This is his retrospective account, not an audited sequence of creditor decisions.