Play Retreats From U.S. Amid Executive Takeover Bid

Icelandic carrier Play will end its remaining U.S. routes later this year and shift to a scaled-back leisure and ACMI-focused model under a proposed management-led takeover that would see the airline delisted from Nasdaq Iceland.

In a notification to the Central Bank of Iceland, CEO Einar Örn Ólafsson and Vice Chairman Elías Skúli Skúlason confirmed plans to submit a voluntary offer for all outstanding shares in Play via a new holding entity, BBL 212 hf. The proposed offer values shares at ISK1 each, a 24.2% premium over the airline’s most recent closing price. Investors will have the option to receive cash or shares in the new entity.

Supporters of the transaction already control 20% of Play’s equity and have secured $7 million in financing, with plans to raise an additional $13 million to complete the transaction and finance operations.

As part of the restructuring, Play will suspend all remaining U.S. services. Flights to New York Stewart will end on Sept. 1, followed by Boston Logan on Sept. 15 and Baltimore/Washington on Oct. 24. Northern European routes will also be trimmed as the airline exits the hub-and-spoke strategy that defined its model when operations launched four years ago.

According to investor documents, Play’s hub-and-spoke routes underperformed financially, contributing a loss of $20 million in 2024 compared to a $24 million profit from point-to-point European leisure markets.

“Due to airspace restrictions, several European airlines have redeployed capacity across the Atlantic, leading to overcapacity in the transatlantic market,” the offer document says. “Many carriers have suspended or terminated East Asia routes, facing a competitive disadvantage against Asian airlines still able to overfly Russia. This has increased pressure on transatlantic yields.”

The revised network will be centered on four Airbus A320-family aircraft operating from Reykjavik Keflavík Airport, targeting leisure and VFR markets. Play plans to expand service to popular and underserved sun destinations, including recently announced additions to Antalya, Faro and Agadir. The company said the leisure travel market has grown at an average rate of 18.4% annually over the past decade.

“We’re focusing on the profitable aspects of the business—sun destination flights—and discontinuing those that have not yielded results,” Ólafsson says. The airline also aims to build its VFR network in Eastern Europe, citing a compound annual growth rate of 26.7% over the past 10 years.

In parallel, Play will increasingly focus on ACMI operations. The airline has already placed four aircraft with SkyUp and is in discussions to lease out two more. These aircraft, along with the rest of the fleet, will be transitioned to Play’s Maltese air operator certificate (AOC), which it secured in March. The Icelandic AOC will be retired.

The investor documents also reveal that Play has signed a memorandum of understanding with a “mid-size international carrier” operating scheduled and charter flights to 90 destinations across 30 countries. The agreement includes leasing services and commercial collaboration to launch new leisure routes. The partner has expressed interest in acquiring up to a 49% stake in Fly Play Europe, the airline’s Malta-based entity.

Another opportunity is under development in Kosovo, where Play is in discussions to help launch a virtual airline in cooperation with three of the country’s largest tour operators. The venture would serve as Kosovo’s flag-carrier and benefit from the country’s strong VFR demand.

The offerors say these moves will enhance Play’s long-term value. “Play could become an attractive acquisition target within the leasing market,” the offer document says. “Play’s modern and fuel-efficient fleet positions it as a valuable asset in this market, especially as current lease agreements approach expiration.”

Should the takeover succeed, Play will complete its AOC transition to Malta, retire its Icelandic AOC and shift most corporate operations to Malta and Lithuania. The revised capital structure and final terms will be detailed in the offer document pending regulatory approval. If financing is secured, the full offer will be submitted to Iceland’s Financial Supervisory Authority.