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

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

The company is Fly Play Europe Holdco. Its subsidiary, Fly Play Europe Limited, holds the aviation licence in Malta. Icelandair had previously announced that it had signed a letter of intent regarding the purchase.

Play’s Maltese arm came under the control of the airline’s creditors after Play collapsed in Iceland in September last year. The creditors took over Fly Play Europe Holdco based on security granted when Play secured 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 return its Icelandic aviation licence and move its operations under the Maltese licence.

Icelandair said the purchase would give it access to an additional aviation licence within Europe and increase operational flexibility. It could also create opportunities for efficiency improvements in Iceland and new business opportunities abroad.

As part of the transaction, the parties have signed a shareholders’ agreement and agreed on financing and the possibility of Icelandair increasing its stake later. The deal is partly conditional on an agreement with Maltese aviation authorities on the continued use of the licence.

“Acquiring a stake in an aviation 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 in a statement.

Icelandair said the purchase would have an insignificant effect on the company’s financial performance this year but represented a long-term opportunity.