Icelandair buys 49% stake in Play’s Maltese operating licence

Icelandair has acquired a 49% stake in the company holding the former airline Play’s Maltese air operator licence, mbl.is reports. The purchase price is 686,000 US dollars, equivalent to about 83.4 million Icelandic krónur.

The company is Fly Play Europe Holdco. Its subsidiary, Fly Play Europe Limited, holds the operating licence in Malta. Icelandair had previously announced a letter of intent concerning the purchase.

Play’s Maltese arm came under the control of the airline’s creditors after Play collapsed in Iceland last September. The creditors took over Fly Play Europe Holdco under security provided when Play obtained 23 million dollars in financing shortly before its collapse.

The Maltese licence had been an important part of Play’s plans to change its operations. The airline had intended to surrender its Icelandic operating licence and move its flight operations under the Maltese licence.

Icelandair said the acquisition would give it access to an additional operating licence within Europe and increase flexibility in its operations. It could also create opportunities for efficiencies in Iceland and new business opportunities abroad.

The transaction includes a shareholders’ agreement, financing arrangements and an option for Icelandair to increase its stake later. The deal is also subject to an agreement with Maltese aviation authorities on the continued use of the operating licence.

“Acquiring a stake in an operating licence in Malta is primarily intended to increase operational flexibility, strengthen Icelandair’s competitiveness and create new opportunities,” Icelandair chief executive Bogi Nils Bogason said.

Icelandair said the acquisition would have an insignificant effect on its financial results this year, but would provide opportunities over the longer term.