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
ITA Airways to Join Lufthansa Group Miles & More Loyalty Program in 2026
ITA Airways will adopt the Lufthansa Group’s Miles & More loyalty program starting April 2026, expanding benefits for frequent flyers.
This article is based on an official press release from Lufthansa Group.
Starting April 1, 2026, ITA Airways will officially adopt Miles & More as its loyalty program, marking a significant step in the Italian carrier’s integration into the Lufthansa Group. According to a recent press release from the company, the transition will open up a vast network of global partners and exclusive rewards for ITA Airways passengers.
The move allows ITA Airways customers to join Europe’s leading frequent flyer program, which currently boasts 39 million members. By registering through the Airlines online portal or mobile app, passengers will immediately gain access to benefits across 35 airline partners and more than 135 additional program partners worldwide.
The integration into Miles & More provides ITA Airways passengers with extensive opportunities to earn and redeem miles. As detailed in the Lufthansa Group announcement, members can accumulate miles on flights operated by all Lufthansa Group airlines, Star Alliance carriers, and other partner airlines. These miles can then be redeemed for award flights, travel upgrades, and various products and services.
To accommodate existing loyal customers, the company stated that an attractive status match offer will be published for ITA Airways passengers who already hold frequent flyer status. Furthermore, new members will be able to earn “Points” to achieve or maintain their status within the Lufthansa Group ecosystem. The Partnerships is expected to expand with additional offers throughout the year.
The adoption of Miles & More is described as a major milestone in the ongoing integration of ITA Airways into the Lufthansa Group as a hub airline. The transition not only enhances the customer experience but also strengthens the loyalty program’s market position.
“Welcoming ITA Airways to the Miles & More program is a unique milestone, not only from a program offer perspective but also from the airline’s customers perspective. With this step, we continue to be on track integrating ITA Airways as Hub Airline.”
According to Dieter Vranckx, Chief Commercial Officer of Lufthansa Group, the strategic decision allows ITA Airways to leverage a globally anchored loyalty program, further integrating the Italian carrier into the group’s commercial powerhouse.
We note that the transition of ITA Airways to the Miles & More program is a logical progression following Lufthansa Group’s integration efforts. By aligning loyalty programs, the group can streamline operations, offer unified benefits to a broader customer base, and incentivize cross-booking among its subsidiary airlines. The promised status match will be a crucial element in retaining ITA Airways’ most valuable frequent flyers during this transition period. According to the Lufthansa Group press release, ITA Airways will officially adopt the Miles & More loyalty program starting April 1, 2026.
No. The company has announced that an attractive status match offer will be made available for ITA Airways customers who already possess frequent flyer status.
Members can earn miles on all Lufthansa Group airlines, Star Alliance airlines, and other partner airlines. Miles can be redeemed for award flights, travel-related awards, and products from over 135 non-airline partners.
Expanding Benefits for Frequent Flyers
Status Match and Earning Points
Strategic Integration and Synergies
AirPro News analysis
Frequently Asked Questions
When does ITA Airways join Miles & More?
Will existing ITA Airways frequent flyers lose their status?
Where can members earn and redeem miles?
Sources
Photo Credit: Lufthansa
Airlines Strategy
Volaris and Viva Aerobus Shareholders Approve Merger Forming Grupo Más Vuelos
Volaris and Viva Aerobus shareholders approve a 50/50 merger to form Grupo Más Vuelos, controlling over 70% of Mexico’s domestic air travel, pending regulatory approvals.
This article summarizes reporting by Yahoo Noticias and an independent industry research report. The original report is restricted or paywalled; this article summarizes publicly available elements and public remarks.
In a landmark decision for Latin American aviation, shareholders of Mexican ultra-low-cost carrier Volaris overwhelmingly approved a merger with rival Viva Aerobus on March 25, 2026. According to an independent industry research report, the transaction will forge a new holding company named “Grupo Más Vuelos,” effectively consolidating the Mexican domestic aviation market.
The mergers of equals, initially announced in December 2025, is poised to create the country’s largest airline group. Based on industry estimates cited in the research report, the combined entity will control between 70% and 75% of Mexico’s domestic departing seats, decisively overtaking legacy carrier Aeromexico.
While the shareholder vote represents a critical milestone, the formation of Grupo Más Vuelos remains subject to stringent regulatory approvals. We note that the deal will serve as a defining test for Mexico’s newly established antitrust watchdog, the Comisión Nacional Antimonopolio (CNA).
The Extraordinary General Shareholders’ Meeting held on March 25, 2026, demonstrated near-unanimous support for the consolidation. According to the provided research report, the assembly achieved a 93.7% quorum, with 91.8% of the outstanding capital stock voting in favor and zero votes against.
To execute the 50/50 merger, Volaris will act as the surviving entity at the holding level. The research data indicates that Volaris will issue exactly 1,078,528,426 new shares to Viva shareholders. Upon closing, both shareholder groups will own an equal 50% stake in Grupo Más Vuelos on a fully diluted basis. The new holding group’s shares will continue trading on the Mexican Stock Exchange (BMV) and the New York Stock Exchange (NYSE).
Despite the corporate integration, the airlines will not immediately merge their consumer-facing operations. The research report confirms a dual-brand strategy, meaning Volaris and Viva Aerobus will retain their independent brands, operating certificates, and day-to-day operations.
Governance of the new holding company will be evenly split. A 12-member board of directors will feature six nominees from Volaris and six from Viva. Leadership roles have also been distributed: Roberto Alcántara Rojas, Viva’s current Chairman, will chair the combined group. Meanwhile, Enrique Beltranena and Juan Carlos Zuazua will remain CEOs of Volaris and Viva, respectively. The scale of Grupo Más Vuelos will fundamentally alter the North-America aviation landscape. The research report notes that Volaris and Viva currently transport approximately seven out of every ten domestic passengers in Mexico.
The combined fleet will exceed 208 Commercial-Aircraft. According to the sourced data, Volaris brings 117 aircraft with an average age of 7.2 years, while Viva contributes 91 aircraft averaging 8.8 years. Executives from both airlines have publicly stated that the merger’s primary goal is to generate economies of scale, lower aircraft ownership costs, and maintain their ultra-low-cost models to offer affordable fares across the Americas.
The consolidation arrives after a turbulent period for the global aviation industry. Throughout 2024 and 2025, both Mexican carriers faced severe supply-chain disruptions. The research report highlights that the Pratt & Whitney engine recalls forced both airlines to ground significant portions of their fleets, driving up operating costs. By merging, the carriers aim to navigate these ongoing supply chain crises jointly rather than competing against one another.
Finalizing the merger could take up to a year, as noted by Volaris CEO Enrique Beltranena in the research report. The most formidable obstacle is clearing Mexico’s Comisión Nacional Antimonopolio (CNA), a federal agency established in July 2025 following constitutional reforms.
Industry analysts cited in the report view this transaction as the CNA’s first major test of institutional independence and technical rigor, given the unprecedented market concentration. Furthermore, the deal requires antitrust and foreign-investment clearances from the United States under the HSR Act, Colombia’s civil aviation authority (Aerocivil), and the Mexican Banking and Securities Commission (CNBV).
The merger has garnered high-level political support. In December 2025, Mexican President Claudia Sheinbaum publicly backed the deal.
President Sheinbaum publicly expressed optimism about the deal, referring to it as a “special alliance” rather than a monopolistic merger.
, Independent Industry Research Report
According to the research report, Sheinbaum expressed optimism that the consolidation would attract significant investment, enable fleet expansion, and boost tourism, though she acknowledged that the CNA holds the final regulatory authority. The creation of Grupo Más Vuelos presents a complex scenario for Mexican aviation. While the airlines promise that economies of scale will result in lower fares, a 70% to 75% market share severely limits domestic competition. We anticipate that consumer advocacy groups will closely monitor pricing trends on trunk routes where Volaris and Viva previously engaged in fierce fare wars.
Additionally, this mega-merger forces Aeromexico into a distant second place in the domestic market. Aeromexico will likely need to pivot its strategy, potentially doubling down on premium international traffic and its SkyTeam alliance partnerships, as competing on volume and price against a unified Volaris-Viva entity will be increasingly difficult.
What is Grupo Más Vuelos? Will Volaris and Viva Aerobus become one airline? When will the merger be completed? Who will lead the new company? Sources: Yahoo Noticias, Independent Industry Research Report
Corporate Structure and Financial Mechanics
Shareholder Vote and Equity Split
Leadership and Dual-Brand Strategy
Market Impact and Fleet Consolidation
Dominating the Domestic Market
Overcoming Supply Chain Headwinds
Regulatory Hurdles and Political Climate
The CNA’s First Major Test
Presidential Backing
AirPro News analysis
FAQ: Grupo Más Vuelos Merger
It is the proposed new holding company resulting from the 50/50 merger of equals between Mexican ultra-low-cost carriers Volaris and Viva Aerobus.
No. According to the research report, both airlines will operate under a dual-brand strategy, maintaining their independent brands, operating certificates, and day-to-day operations.
The timeline depends on regulatory approvals. Volaris CEO Enrique Beltranena has indicated the process could take up to a year from the shareholder approval in March 2026.
Roberto Alcántara Rojas will serve as Chairman of the 12-member board. Enrique Beltranena and Juan Carlos Zuazua will continue as CEOs of Volaris and Viva, respectively.
Photo Credit: Montage
Airlines Strategy
IAG Likely Abandons TAP Air Portugal Bid Over Ownership Limits
IAG is reportedly pulling back from TAP Air Portugal acquisition due to Portugal’s 49.9% stake limit and strict privatization terms.
This article summarizes reporting by Reuters and Bloomberg News.
International Airlines Group (IAG) is reportedly stepping back from its potential acquisition of state-owned TAP Air Portugal. According to reporting by Bloomberg News and summarized by Reuters, the parent company of British Airways, Iberia, Vueling, and Aer Lingus is leaning against submitting a serious bid due to the Portuguese government’s strict privatization terms.
The core of the disagreement centers on ownership limits. Lisbon is offering a maximum 49.9 percent stake in the national carrier, a structure that fundamentally clashes with IAG’s strategic requirement for majority control.
With a deadline for non-binding offers set for April 2, 2026, IAG’s potential withdrawal would reshape the European aviation consolidation landscape. This development leaves Lufthansa Group and Air France-KLM as the primary contenders for TAP’s highly coveted South Atlantic route network.
TAP Air Portugal was fully nationalized during the COVID-19 pandemic after receiving billions in state aid. To reduce the state’s financial burden and integrate the airline into a global alliance, the government relaunched the long-delayed privatization process in July 2025. By January 2026, formal invitations for non-binding offers were extended to IAG, Lufthansa, and Air France-KLM.
IAG officially expressed interest in TAP in November 2025. However, the parameters set by Prime Minister LuÃs Montenegro’s administration have proven difficult for the airline conglomerate to accept.
The Portuguese government intends to sell no more than 49.9 percent of TAP, reserving 5 percent of that portion for airline employees. This cap directly contradicts IAG’s established merger and Acquisitions strategy. As noted in public remarks cited by the research report, IAG Chief Financial Officer Nicholas Cadbury has been clear about the company’s baseline requirements for acquisitions:
“…clear path to full or majority ownership.”
Beyond ownership limits, Lisbon has attached stringent conditions to the sale to protect national interests. According to the provided research report, these include maintaining TAP’s strategic hub in Lisbon and protecting routes deemed vital to the Portuguese economy. Furthermore, Prime Minister Montenegro has publicly stated that ensuring operational growth across Portugal’s regional Airports, such as Porto’s Francisco Sá Carneiro airport, Faro, and Madeira, is a mandatory condition. He described this regional growth guarantee as a “non-negotiable requirement” for the privatization.
Despite the fundamental misalignment on terms, aviation analysts suggest IAG may not completely walk away before the April 2 deadline.
Industry insiders note that IAG could still submit a non-binding offer. This tactical move would allow the group to access TAP’s confidential data rooms. Additionally, maintaining a presence in the bidding process could force rivals Lufthansa and Air France-KLM to pay a higher premium for the Portuguese carrier.
If IAG officially bows out, the battle for TAP will become a direct duel between Lufthansa and Air France-KLM. TAP is highly valued for its lucrative network connecting Europe to Brazil, Africa, and North America. A successful acquisition by either remaining competitor would significantly alter market dominance on South Atlantic routes.
IAG’s hesitation regarding TAP Air Portugal must be viewed through the lens of its recent regulatory struggles. In mid-2024, the group was forced to abandon its attempt to fully acquire Spanish carrier Air Europa due to insurmountable antitrust opposition from European Union Regulations.
Having been burned by the Air Europa experience, we assess that IAG appears highly cautious about entering another complex, heavily conditioned transaction, especially one where it would be relegated to a minority shareholder role. The group generally avoids minority stakes, making the Portuguese government’s 49.9 percent cap a likely dealbreaker from the start. A pivot toward integrating existing assets rather than chasing heavily conditioned minority stakes seems to be the current operational priority for the conglomerate.
Interested parties have until April 2, 2026, to submit non-binding offers to the Portuguese government.
IAG requires a path to majority ownership, but Portugal is only selling a maximum 49.9 percent stake. Additionally, the government is imposing strict conditions on regional airport growth and route protections. With IAG likely stepping back, Lufthansa Group and Air France-KLM are the primary remaining competitors in the privatization process.
Sources:
The Clash Over Ownership and Conditions
Minority Stake Limitations
Non-Negotiable Strategic Demands
Tactical Bidding and Industry Implications
The “Phantom Bid” Strategy
Shifting Power Dynamics in European Aviation
AirPro News analysis
Frequently Asked Questions
When is the deadline to bid for TAP Air Portugal?
Why is IAG reportedly abandoning its bid?
Who are the remaining bidders for TAP?
Photo Credit: TAP Air Portugal
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