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Iceland, Play against state funds guaranteed to Icelandair

These two carriers are now at loggerheads

"Everything works out": the motto used by Iceland to get out of the serious economic crisis of 2008 could also be used for an issue that is currently affecting the transport sector. Air carrier Play, which practically “replaced” Wow Air last year (read also the news published by AVIONEWS) is at loggerheads with another airline of the Scandinavian nation, Icelandair. In this case, will everything work out? Local optimism is proverbial, even if the debate between the companies is very hard due to the granting of a credit line.

Play did not like the government funds guaranteed to flag carrier, expressly asking for a revocation of concession; to be even more convincing, it then turned to ESA, the supervisory authority of Efta (free trade association to which Iceland is also a member). There are basically two reasons why the state guarantee should be revoked. Play's lawyers believe that legal basis of the credit line is wrong, and the Reykjavik government didn't clarify some fundamental aspects to ESA. For its part, executive replied through the ministry of finance; the dicastery remains convinced that it has done the right thing and mentioned other similar aid in Europe, including that of Alitalia.

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AVIONEWS - World Aeronautical Press Agency
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