Icelandair completes deal for 49% stake in former rival PLAY’s Maltese operation

Icelandair now owns 49% of Fly Play Europe Holdco, the Maltese company that once belonged to its former rival, PLAY Airlines. The Icelandic flag carrier announced on October 19, 2026, that all the necessary conditions for this had been met and the deal was complete.

The main prize is actually a license. Fly Play Europe Holdco’s subsidiary, Fly Play Europe Limited, holds an air operator certificate (AOC) in Malta, the approval that an airline requires before it can fly commercially. 

With its stake in the company, Icelandair may eventually operate some of its flights under the Maltese certificate rather than its Icelandic one.

The two parties signed the purchase agreement on August 20, 2026, and the transaction closed approximately two months later.

Icelandair pays $686,000 for a minority stake in the Maltese business

According to a report from AeroMorning, Icelandair paid $686,000 for its share, acquired from a fund representing PLAY’s former creditors. The creditors retain the remaining 51%.

However, Icelandair has not acquired the license itself. Its stake is in the holding company, with Fly Play Europe Limited remaining as the license holder, accountable to Malta’s aviation regulator, Transport Malta.

Several terms of the deal have not been made public. These include undisclosed financing arrangements and options that would allow Icelandair to increase its stake at a later date. Without the full details of the shareholder agreement, the extent of Icelandair’s control over the company remains unclear. 

The airline said that the acquisition would not have a material impact on its 2026 financial results.

Background: How PLAY’s Maltese business outlived the airline

PLAY was an Icelandic low-cost carrier that competed head-to-head with Icelandair on flights between Europe and North America. It set up the Maltese company to help it to grow internationally, backed by around ISK 2.8 billion (roughly $23.1 million) in secured bonds, according to AeroMorning.

Before its collapse, PLAY transferred some of its aircraft to its Maltese license. At least four Airbus A320 family aircraft were leased, with crew, to SkyUp Malta, the Maltese subsidiary of Ukraine’s SkyUp Airlines. In the Summer of 2025, there were reports that PLAY was considering moving its entire fleet to the Maltese company as part of its restructuring efforts.

This plan did not see fruition, though. PLAY ceased operations in September 2025, and its Icelandic parent company was declared bankrupt. The Maltese subsidiary, however, remained active and retained its license. PLAY’s creditors subsequently took control of the business under the terms of their bonds.

Icelandair signed a letter of intent to buy into the business on April 1, 2026, before reaching a formal agreement in August.

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