The newly announced low-cost airline, Play, is reportedly having a hard time getting Icelandic money into their company.
Early this March, Iceland’s only budget airline, “ WOW air”, announced bankruptcy, leaving hundreds without jobs and the Keflavík airport full of stranded tourists. A gap was left with the ending of the airline, but a new project was quickly here to replace it: “WAB air”, was announced. That ended shortly too, and “Play” was born as the final form of the previously mentioned plan, mainly composed of WOW air’s former board members.
In the initial presentation of the new airline, Arnar Már Magnússon, the director of Play and the former director of flight operations of WOW Air, announced that 80% of the investment would be foreign. But Icelandic investors are not running to help with the leftover 20%. Visir reports that the company has been having a very hard time getting the 12 million euros they need from investors.
The investment company Iceland Securities (ÍV) has been asking private companies to come to the financing of Play to several privates, turning mainly to investors and companies in the tourism area, and fund management companies. They are expected to acquire 50% of the stake. Market sources have said that the main reason for distrust is the fact that the founders of the company have acquired a great number of shares in the company. Play has secured a 40 million euros loan with 8% interest from the British fund, Athene Capital. The same fund also holds a 10% share in Play. Play needs to have 8 million euros liquid as collateral for the loan.
Play is expected to start flying by the end of this year, with no fixed dates yet. Their website is already running and announces a give away of 1000 free tickets.
If you’re as confused as we are, click here to learn more about what is going on with airlines in Iceland.
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