Airlines Strategy
PLAY Airlines to Wet-Lease Aircraft Amid Financial Challenges
Icelandic low-cost carrier PLAY has announced a significant strategic move to wet-lease three of its aircraft to an undisclosed European operator until the end of 2027. This decision, disclosed alongside the airline’s 2024 financial results, marks a pivotal shift in PLAY’s operational strategy as it seeks to stabilize its financial performance and align with its long-term projections. The move comes amid a challenging financial landscape, with PLAY reporting a USD 66 million loss for 2024, a substantial increase from the previous year despite revenue growth.
Founded in 2019 and commencing operations in June 2021, PLAY has faced mixed results since its inception. While its flights between Iceland and Southern Europe have been profitable, the yields on transatlantic routes have been disappointing, particularly in 2024 due to increased competition in the North American market. This has prompted the airline to reassess its business model and explore alternative revenue streams, including the wet-lease market. The decision to wet-lease aircraft reflects broader industry trends where airlines are optimizing their fleets to reduce costs and adapt to economic uncertainties.
PLAY’s journey has been marked by both successes and challenges. The airline initially adopted a hub-and-spoke model, connecting passengers from North America to European destinations via Iceland, similar to the now-defunct WOW Air. However, PLAY has focused on operating narrowbody jets, such as the Airbus A320neo and A321neo, to avoid the financial strains associated with twin-aisle aircraft. Despite this, the airline has struggled to achieve consistent profitability, particularly on transatlantic routes.
In 2024, PLAY faced significant financial headwinds, leading to a USD 66 million loss. This was attributed to increased competition in the North American market and the need to adjust its business strategy. As part of its financial restructuring, PLAY has paused its fleet growth for 2024, terminated two Letters of Intent (LOIs) for dry leases of aircraft due in 2025, and is seeking to boost its capital by uplisting from the First North Growth Market to the Nasdaq Main Market in Iceland. These measures are aimed at ensuring the airline’s long-term viability and financial stability.
Einar Örn Ólafsson, CEO of PLAY, emphasized the airline’s commitment to focusing on profitable routes and exploring new opportunities. “While our EBIT remains substandard, we saw a clear improvement in the fourth quarter, signaling that our revised flight schedule is already driving higher revenues and improved financials,” he said. “Looking ahead to 2025, we are optimistic about continued progress.”
“In short, we will focus on the aspects of our business that have proven both successful and profitable—namely, transporting passengers between Southern Europe and Iceland.” – Einar Örn Ólafsson, CEO of PLAY
PLAY’s decision to wet-lease three of its aircraft is a strategic move to optimize its fleet and generate additional revenue. The airline’s fleet currently comprises ten Airbus narrowbodies, including six A320-200N, three A321-200N, and one A321-200NX. One A321-200N is already wet-leased to GlobalX, a US-based carrier operating out of Miami International Airport. The new wet-lease agreements, set to begin in spring 2025, will see three additional aircraft leased to an undisclosed European operator until the end of 2027.
This shift towards the wet-lease market is part of PLAY’s broader strategy to focus on profitable routes and reduce its exposure to the volatile transatlantic market. The airline has also applied for an air operator’s certificate (AOC) in Malta, with plans to register six to seven of its aircraft in Malta and maintain three to four in Iceland. This move is expected to provide PLAY with greater operational flexibility and access to new markets.
Birgir Jónsson, CEO of PLAY, highlighted the importance of adaptability in the face of external challenges. “The last few months have shown us that external factors are something that we need to take into account, and we basically need a buffer for those fluctuations,” he said during a quarterly investor call. This underscores the airline’s focus on financial stability and its efforts to navigate the complexities of the aviation industry. PLAY’s decision to wet-lease aircraft reflects broader industry trends where airlines are seeking to optimize their fleets and reduce costs in response to economic uncertainties and changing market demands. The wet-lease market, which involves leasing aircraft along with crew, maintenance, and insurance, has become an attractive option for airlines looking to generate additional revenue without the operational burden of managing the aircraft themselves.
For PLAY, this move is expected to provide a stable and positive contribution to its business, particularly as it shifts its focus away from the transatlantic market and towards more profitable routes between Southern Europe and Iceland. The airline’s efforts to obtain a Maltese AOC and uplist on the Nasdaq Main Market in Iceland are also part of a broader trend of airlines seeking more favorable regulatory and financial environments to enhance their operational flexibility and access to capital.
As PLAY continues to adapt to the evolving aviation landscape, its ability to navigate financial challenges and capitalize on new opportunities will be critical to its long-term success. The wet-lease agreements, along with its strategic focus on profitable routes and operational flexibility, position the airline to weather the uncertainties of the industry and emerge stronger in the years to come.
PLAY’s decision to wet-lease three of its aircraft to an undisclosed European operator marks a significant step in the airline’s efforts to stabilize its financial performance and align with its long-term projections. This move, set against the backdrop of a challenging financial landscape, reflects the airline’s commitment to adapting to changing market conditions and exploring new revenue streams. By focusing on profitable routes and optimizing its fleet, PLAY is positioning itself for continued progress and long-term viability.
Looking ahead, the airline’s ability to navigate the complexities of the aviation industry and capitalize on new opportunities will be critical to its success. As PLAY continues to implement its revised business model and explore new projects for its fleet, it remains optimistic about its future trajectory. The wet-lease agreements, along with its strategic focus on operational flexibility and financial stability, underscore the airline’s resilience and determination to thrive in an ever-changing industry.
What is a wet-lease agreement? Why is PLAY wet-leasing its aircraft? What are PLAY’s future plans? Sources: ch-aviation, Simple Flying
Iceland’s PLAY to Wet-Lease Out Three Aircraft for Two Years
Background and Financial Context
Operational Shifts and Wet-Lease Strategy
Future Implications and Industry Trends
Conclusion
FAQ
A wet-lease agreement involves leasing an aircraft along with its crew, maintenance, and insurance. This allows the lessee to operate the aircraft without the operational burden of managing it themselves.
PLAY is wet-leasing its aircraft to generate additional revenue and optimize its fleet. This move is part of the airline’s broader strategy to focus on profitable routes and reduce its exposure to the volatile transatlantic market.
PLAY plans to focus on profitable routes between Southern Europe and Iceland, obtain a Maltese AOC, and uplist on the Nasdaq Main Market in Iceland. These measures are aimed at enhancing the airline’s operational flexibility and financial stability.
Airlines Strategy
AirAsia X Completes Acquisition of Capital A Aviation Assets
AirAsia X finalizes acquisition of Capital A’s aviation businesses, consolidating airlines under AirAsia Group and raising RM1 billion via private placement.
This article is based on an official press release from AirAsia Newsroom.
On January 19, 2026, AirAsia X Berhad (AAX) officially completed the acquisitions of Capital A Berhad’s aviation businesses, specifically AirAsia Berhad (AAB) and AirAsia Aviation Group Limited (AAAGL). According to the official announcement from the AirAsia Newsroom, this transaction marks the conclusion of a comprehensive six-year restructuring plan designed to consolidate all AirAsia-branded Airlines under a single listed entity, now referred to as the AirAsia Group.
The completion of this deal allows Capital A to exit the aviation sector entirely, shifting its focus to its non-aviation digital and logistics portfolio. Simultaneously, the move is intended to aid Capital A in exiting its Practice Note 17 (PN17) financially distressed status. For the newly consolidated AirAsia Group, the merger unifies long-haul and short-haul operations under one management structure, aiming to streamline network planning and reduce operational costs.
The acquisition was executed through a combination of share issuance and debt assumption, effectively transferring the aviation assets from Capital A to AAX. The financial terms disclosed in the press release outline the scale of the consolidation.
As part of the agreement, AAX issued approximately 2.31 billion new ordinary shares to Capital A and its entitled shareholders. In addition to the equity transfer, AAX assumed RM3.8 billion in debt that Capital A previously owed to AirAsia Berhad. This restructuring cleanses Capital A’s balance sheet while capitalizing the new aviation group for future operations.
Concurrently with the acquisition, AAX conducted a private placement to independent third-party investors. The airline issued 606 million placement shares, raising gross proceeds of RM1 billion. According to the announcement, the new consideration shares and placement shares were listed and quoted on the Main Market of Bursa Malaysia on January 19, 2026.
The primary driver behind this consolidation is the “One Airline, One Brand” strategy. By merging the short-haul capabilities of AirAsia Berhad and the regional affiliates under AAAGL with the long-haul operations of AirAsia X, the group aims to optimize fleet utilization and connectivity.
Capital A CEO Tony Fernandes described the completion of the deal as a pivotal moment for the organization. In the press release, Fernandes emphasized the resilience required to reach this stage. “This is one of the most emotional moments of my career… We chose to rebuild the right way, and today, AirAsia emerges as a consolidated group with global ambitions.”
With the aviation assets divested, Capital A will pivot to becoming a dedicated non-aviation company. Its focus will now center on its digital ecosystem, which includes Teleport (logistics and cargo), AirAsia MOVE (travel and lifestyle app), ADE (Asia Digital Engineering), and Santan (in-flight catering and food retail).
The leadership of the newly formed AirAsia Group has expressed confidence that the merger will unlock significant synergies. Datuk Fam Lee Ee, Chairman of AirAsia X, stated that the integration creates a “stronger, more streamlined aviation platform” positioned for sustainable growth. He noted that the unified entity is better equipped to reinforce its leadership in the ASEAN region.
The completion of this merger represents a significant shift in the Asia-Pacific aviation landscape. By combining balance sheets and fleets, the new AirAsia Group is likely to pursue a more aggressive expansion strategy. The mention of a “low-cost network carrier” model suggests the group intends to compete more directly with full-service carriers by offering seamless connectivity between ASEAN and global destinations, potentially utilizing new hubs in regions like the Middle-East.
Furthermore, the RM1 billion raised through private placement provides immediate liquidity to support fleet optimization and route expansion. As the group finalizes new Orders, we expect to see a push toward modernizing the fleet to lower seat-mile costs, a critical factor in maintaining the low-cost model while flying longer sectors.
AirAsia X Completes Acquisition of Capital A Aviation Assets, Unifying Operations
Transaction Structure and Financial Details
Share Issuance and Debt Assumption
Private Placement and Listing
Strategic Rationale: “One Airline, One Brand”
Executive Commentary and Future Outlook
AirPro News Analysis
Sources
Photo Credit: AirAsia
Airlines Strategy
Air India and Singapore Airlines Sign Framework for Joint Business Agreement
Air India and Singapore Airlines formalize a framework to coordinate schedules, unify bookings, and enhance loyalty benefits following the Air India-Vistara merger.
Airlines Air India and Singapore Airlines (SIA) have formally signed a Commercial Cooperation Framework Agreement, marking a pivotal step toward a comprehensive Joint Business Agreement (JBA). The agreement, signed on January 16, 2026, in Mumbai, aims to deepen the operational integration between the two carriers following the completion of the Air India-Vistara merger in late 2024.
According to the official press release, the document was signed by Air India CEO and Managing Director Campbell Wilson and Singapore Airlines CEO Goh Choon Phong. The framework establishes a roadmap for the two airlines to coordinate flight schedules, unify booking systems, and offer reciprocal loyalty benefits, subject to regulatory approvals from authorities in India and Singapore.
This development underscores the strengthening ties between the Tata Group-owned carrier and Singapore Airlines, which now holds a 25.1% stake in the enlarged Air India group following an Investments of approximately INR 3,195 crore (SGD 498 million).
The primary objective of the new framework is to allow the airlines to operate more like a single entity on key routes between India and Singapore, as well as in downstream markets. By aligning their networks, the carriers aim to offer passengers more seamless connectivity.
Under the proposed JBA, Air India and SIA plan to coordinate flight timings to minimize layovers and optimize connections. The agreement outlines a “unified customer journey,” which would enable passengers to book flights across both airlines on a single itinerary. This integration promises seamless baggage transfer and boarding processes, reducing friction for travelers moving between the two carriers’ networks.
Beyond the core India-Singapore corridor, the framework explores cooperation in wider markets. The airlines intend to leverage their respective hubs, Delhi/Mumbai and Singapore Changi, to support global connectivity. This includes potential expansion into markets such as Australia and Southeast Asia, providing Indian travelers with more robust options for eastbound travel.
“This agreement is a significant milestone in our relationship with Singapore Airlines. It allows us to leverage our combined strengths to offer our customers a world-class travel experience and enhanced connectivity.”
, Campbell Wilson, CEO & MD, Air India (via press release)
A key component of the framework is the integration of loyalty programs. The airlines are working to enhance reciprocal benefits for members of Air India’s newly rebranded Maharaja Club (formerly Flying Returns) and SIA’s KrisFlyer program. While both airlines are members of the Star Alliance, this bilateral agreement seeks to offer perks that go beyond standard alliance benefits.
Additionally, the carriers plan to collaborate on corporate travel programs. This would allow them to offer unified Contracts to corporate clients, simplifying travel management for businesses that require frequent travel between India and the Asia-Pacific region.
This commercial framework follows the historic Mergers of Vistara into Air India, which was officially completed on November 12, 2024. Vistara was a joint venture between Tata Sons and Singapore Airlines, and its integration into Air India was a prerequisite for SIA’s Acquisitions of a 25.1% equity stake in the unified national carrier.
Prior to this framework, the airlines had already begun tightening their operational cooperation. In October 2024, they significantly expanded their codeshare agreement, adding 51 new destinations. Currently, Air India and Singapore Airlines codeshare on 61 points across 20 countries, providing a strong foundation for the deeper integration proposed in the new JBA.
The move to establish a Joint Business Agreement is widely interpreted by industry observers as a strategic realignment to counter “Super Connector” carriers from the Middle East, such as Emirates and Qatar Airways. By coordinating schedules, Air India can effectively utilize Singapore’s Changi Airport as a robust hub for traffic heading to Australia, New Zealand, and the U.S. West Coast.
Furthermore, this Partnerships reflects a growing trend of “bloc-based” aviation cooperation. In an era of geopolitical volatility and airspace restrictions, forming tighter operational units allows allied carriers to insulate themselves from external shocks. For Air India, a deep partnership with SIA provides critical alternative routing options for long-haul flights that might otherwise be impacted by airspace closures in the west.
The implementation of the Joint Business Agreement is explicitly “subject to regulatory approvals.” Competition commissions in both India (CCI) and Singapore (CCCS) are expected to scrutinize the deal to ensure it does not create a monopoly on the high-volume India-Singapore routes. Until these approvals are granted, the airlines will continue to operate under their existing codeshare arrangements.
When was the agreement signed? What is the main goal of the agreement? Does Singapore Airlines own part of Air India? Will loyalty members see new benefits?
Air India and Singapore Airlines Sign Framework for Joint Business Agreement
Deepening Operational Integration
Coordinated Schedules and Unified Journeys
Expanded Network Reach
Loyalty and Corporate Travel Enhancements
Strategic Context: Post-Merger Landscape
AirPro News Analysis
Regulatory Outlook
Frequently Asked Questions
The Commercial Cooperation Framework Agreement was signed on January 16, 2026.
The goal is to establish a definitive Joint Business Agreement (JBA) that allows Air India and Singapore Airlines to coordinate schedules, pricing, and operations on key routes.
Yes, following the Vistara merger in November 2024, Singapore Airlines holds a 25.1% stake in the Air India group.
Yes, the framework aims to enhance reciprocal benefits for Maharaja Club and KrisFlyer members beyond standard Star Alliance perks.
Sources
Photo Credit: Air India
Airlines Strategy
TAP Air Portugal Expands Porto Hub with New Routes and Maintenance Base
TAP Air Portugal invests $23.5M in a Porto maintenance facility and launches new routes, boosting operations and jobs in Northern Portugal.
This article summarizes reporting by Aviation24.be.
In a significant move to decentralize operations and bolster its presence in Northern Portugal, TAP Air Portugal has announced a comprehensive expansion plan for Francisco Sá Carneiro Airport (OPO). According to reporting by Aviation24.be, the airlines confirmed in mid-January 2026 that it will construct a new maintenance and engineering facility in Porto and launch several new international routes. This development marks a pivotal shift in the carrier’s strategy, positioning Porto as a robust secondary hub alongside its primary base in Lisbon.
The announcement comes as the airline prepares for partial privatization and seeks to address capacity constraints at Lisbon’s Humberto Delgado Airport. By investing in infrastructure and connectivity in Porto, TAP aims to improve operational resilience and capture growing demand from both business and leisure travelers.
A central pillar of this expansion is the construction of a new base maintenance and engineering hangar at Porto Airport. Aviation24.be reports that the facility is scheduled for completion in 2028. Once operational, the hangar will be capable of accommodating two Airbus A321-sized aircraft simultaneously, allowing the airline to internalize major fleet inspections that were previously outsourced or routed through the congested Lisbon hub.
While TAP’s official statement did not disclose the exact financial details, industry estimates cited in the report suggest the investments is valued at approximately $23.5 million (€21-22 million). The project is expected to generate roughly 200 highly specialized jobs, contributing to the region’s growing reputation as an aviation technical cluster.
TAP CEO LuÃs Rodrigues has championed the project as a critical component of the airline’s future. In remarks covered by the report, Rodrigues described the new hub as a “decisive step” for the region, noting that it will enable the carrier to reduce operating costs and improve fleet availability by performing C-checks locally.
Alongside the infrastructure commitment, TAP is significantly increasing its flight schedule from Porto for 2026. The expansion includes the launch of three new routes and the enhancement of existing services to year-round operations.
According to the schedule details provided by Aviation24.be, the new connections include: These routes will primarily utilize the Airbus A320neo family of Commercial-Aircraft, which offers improved fuel efficiency and reduced noise levels compared to previous generations.
A key highlight of the network update is the transition of the Porto–Boston route from a seasonal summer service to a year-round operation. This change addresses sustained demand from the large Portuguese-American community in Massachusetts and signals TAP’s confidence in transatlantic traffic beyond the peak holiday months.
Additionally, the airline will boost connectivity to the island of Madeira. The frequency on the Porto–Funchal route will increase from 14 to 18 weekly flights starting March 29, 2026. In total, TAP plans to operate 135 weekly direct flights from Porto during the winter season, including 13 weekly intercontinental services to destinations such as Rio de Janeiro, São Paulo, New York, and Luanda.
We view this expansion as a strategic diversification of risk for TAP Air Portugal. For years, the airline has been heavily reliant on the saturated Lisbon airport, which has limited its ability to grow. By establishing a “mini-hub” in Porto with its own maintenance capabilities, TAP is effectively creating a second operational pillar. This not only alleviates pressure on Lisbon but also increases the airline’s valuation and attractiveness to potential investors ahead of its expected partial privatization later this year.
Furthermore, the timing of the maintenance investment aligns with broader regional trends. With Lufthansa Technik also planning a component repair facility near Porto by 2027, Northern Portugal is rapidly emerging as a significant aviation maintenance hub in Europe.
TAP Air Portugal Solidifies Porto as Strategic Hub with New Routes and Maintenance Base
Major Investment in Maintenance Infrastructure
Economic Impact and Capabilities
Network Expansion: New Routes and Frequencies
New Destinations for 2026
Strengthening Transatlantic Ties
AirPro News Analysis
Sources
Photo Credit: TAP Air Portugal
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