Icelandair announced on April 1, 2026 that it has “signed a Letter of Intent (LOI) to initiate discussions regarding the possible purchase of a 49% share in Fly Play Europe, a company registered in Malta and holding a Maltese Air Operator Certificate (AOC)”.

Fly Play Europe was originally established by PLAY Airlines prior to the Icelandic airline’s bankruptcy, receiving its AOC in March 2025.

Icelandair has given the following rationale for the potential investment in Fly Play Europe:

“Acquiring a share in the company would open up new opportunities for Icelandair, for example in charter services as the Maltese company has access to more extensive air service agreements and double taxation treaties.”

A growing list of airlines with a Maltese AOC

If the investment goes ahead, Icelandair would join an increasing number of European airlines with a Maltese AOC.

Ryanair, Wizz Air and Eurowings have all set up Maltese subsidiaries in recent years. This is in addition to several ACMI operators with AOCs in Malta.

Why do so many airlines hold a Maltese AOC?

As a foundation, Malta offers an EU operating certificate with access to all the attendant rights to operate scheduled air services within Europe as well as EU regulatory oversight.

But that is true of many European countries.

What differentiates Malta is that it enables airlines with operating bases across multiple countries to avoid the complications of double taxation for their crew.

Unlike a number of other European jurisdictions, crew working for a Maltese airline are taxed only in their country of residence rather than in the country where the airline holds its operating certificate.

In its FY2019 Annual Report, Ryanair explained that the purchase of Malta Air would:

“allow our pilots and cabin crew in those countries to pay their taxes in their country of residence, as opposed to paying them in Ireland, which was required under Irish law while these aircraft were on the Irish AOC. Moving these crews to local taxation and local contracts of employment, is central to the agreements we reached with our people and our unions in each of these countries.”

Similarly, in 2022, Eurowings Europe moved its country of registration from Austria to Malta. The airline told the Malta Independent that:

“The complex double taxation in Austria has been a disadvantage for Eurowings Europe crews for years. Currently, regardless of the individual's place of residence and country of employment, most of the wage taxation falls to the country in which the airline's legal domicile is located - in our case, Austria. However, the majority of our Eurowings Europe employees live in Spain, the Czech Republic, Sweden, etc. …
A legal domicile in Malta makes it possible for tax and social security contributions of employees to be paid in full in the respective country of employment”

In contrast, easyJet maintains an Austrian-registration for its European subsidiary, easyJet Europe, which was set up in preparation for Brexit.