Icelandair Buys Into the Maltese Airline Its Failed Rival PLAY Left Behind

Icelandair Group completed the purchase of a 49% stake in Play Europe on August 21, 2026, paying $686,000 for a piece of the Maltese airline subsidiary its bankrupt budget rival PLAY set up before it collapsed last year. The deal gives Iceland’s flag carrier a second Air Operator Certificate, this one issued in the European Union rather than Iceland.

Icelandair bought the stake from FPE hs., a fund managed by Isafold Capital Partners that had ended up holding Play Europe’s parent company. Icelandair signed a letter of intent to pursue the deal back on April 2, 2026, and has secured options to increase its stake later.

A Certificate That Outlived the Airline That Built It

PLAY built Play Europe as part of an October 2024 restructuring, aiming to wet-lease aircraft to other European carriers through the Maltese subsidiary. Malta’s Civil Aviation Directorate issued Play Europe its own Air Operator Certificate on March 27, 2025, and the unit began flying an Airbus A321neo, registered 9H-PEA, for operators including SkyUp Malta.

PLAY itself never recovered from years of losses. On September 29, 2025, the Icelandic budget carrier abruptly halted every flight and filed for bankruptcy in Reykjavik, putting roughly 400 employees out of work. Play Europe’s Maltese certificate survived the collapse as a separate legal entity, which is what Icelandair is now buying into.

Why Icelandair Wants a Second AOC

An Air Operator Certificate is the safety and operational license a regulator issues before an airline can fly commercially under its rules. Icelandair already holds one from Iceland, which sits in the EEA but outside the EU. A Maltese AOC gives it a certificate issued inside the EU instead.

Icelandair Group chief executive Bogi Nils Bogason said the stake was meant to “increase operational flexibility, strengthen Icelandair’s competitiveness, and create new opportunities, all with the aim of supporting the continued development of our Keflavik hub,” according to a statement reported by CAPA.

The deal still needs sign-off from Maltese aviation authorities on Play Europe’s continued use of its AOC under the new ownership. Icelandair said the transaction’s financial impact this year will be immaterial, calling it a long-term strategic move rather than an immediate earnings driver.

The subsidiary’s lone aircraft is an Airbus A321neo built in 2018, already registered in Malta and flying ACMI contracts for other carriers. If Icelandair expands its own use of the certificate, it would let the airline base or lease aircraft in Malta while keeping its main operation at Keflavik.