Icelandair has signed a letter of intent to acquire a 49 percent stake in Fly Play Europe, a Malta-based subsidiary of the bankrupt Icelandic low-cost carrier Fly Play. The move targets the entity's valid Air Operator Certificate and aims to enhance operational flexibility through Malta's favorable tax treaties and air service agreements. Any deal remains preliminary, pending due diligence and creditor arrangements from Fly Play's September bankruptcy.
Fly Play's Rapid Rise and Fall
Fly Play launched in 2021, building on the legacies of failed Icelandic low-cost carriers Primera Air and WOW air. The airline shifted strategies late in its run, establishing Fly Play Europe in Malta during a November 2024 restructuring to access lower tax rates. That subsidiary obtained its Air Operator Certificate in March 2025, with four Airbus A321neos transferred by July and two A320neos planned for September.
Fly Play Europe handled wet-lease and charter operations for its parent and third parties, including discussions with a Kosovo startup. Operations halted abruptly on September 29 when Fly Play filed for bankruptcy, leaving the Maltese entity intact amid ongoing shareholder and director changes since January.
Malta's Appeal for European Carriers
Malta attracts airlines like Ryanair, Wizz Air, and Lufthansa Group subsidiaries due to double taxation treaties and broader air service access. Icelandair's filing highlights these benefits, noting that a stake in Fly Play Europe would enable charter expansions and fleet separation: long-haul aircraft under Icelandic operations, others in Malta for efficiency.
Icelandair CEO Bogi Nils Bogason emphasized added flexibility. "Most airlines in our markets, especially in Europe, operate more than one air operator certificate, giving them greater flexibility in their operations," he stated. "Having access to an air operator certificate in Malta in addition to the Icelandic one can open up new and exciting business opportunities."
Icelandair's Broader Fleet and Efficiency Drive
The carrier operates a mixed fleet of six Airbus A321LRs, 17 Boeing 737 MAX 8s, four MAX 9s, nine 757-200s, two 757-300s, and four 767-300s. Older Boeing types face phase-out by early 2028, with A321LRs replacing 757s; the fleet will reach 52 aircraft in 2026, followed by 13 A321XLRs from 2029.
Icelandair already owns Loftleidir Icelandic fully, which generated $112 million in turnover and $20.4 million EBIT in 2025 through leasing. Yet Malta's terms offer distinct advantages over that subsidiary, positioning the potential acquisition as a step toward streamlined operations and competitive edge in Europe's fragmented aviation market.
