Niceair Files For Bankruptcy Just 1 Year After Launching

Icelandic airline, Niceair, has filed for bankruptcy just short of one year since its launch. Before the latest announcement, the airline had been plagued with issues such as the loss of the sole plane in its fleet.

Niceair Plane
Icelandic airline Niceair started operating in 2022. © Norbert Schmidt

Niceair Files For Bankruptcy –  A Blow For Icelandic Aviation

Despite strong performance and plans to expand its route network in summer 2023, Iceland’s Niceair has formally declared bankruptcy. Launched just under a year ago in June 2022, the airline’s woes became apparent last month when it announced that it would suspend operations and cancel all fights, with the airline now confirming that it had laid off its staff at the end of the same month.

In April, Niceair lost access to the only aircraft in its fleet: an Airbus A319. Niceair’s operating licence was held with Hi Fly, a Portuguese charter airline which specialises in wet leasing aircraft. It is claimed that although Niceair had paid all of its instalments for the aircraft lease on time, Hi Fly’s Maltese subsidiary, Hi Fly Malta, had failed to transfer the payments to the aircraft’s owner Avolon Aerospace Leasing Ltd. Hi Fly Malta denies the claim and instead blames Niceair for failing to meet its contractual obligations.

Earlier in the month, Niceair’s managing director, Þorvaldur Lúðvík Sigurjónsson, shared his hopes for the aircraft sourcing issue to be resolved before the start of the busy summer season; unfortunately, the airline was unable to source a replacement aircraft in time and thus could not fulfil its commitments to its passengers.

Announcing the news, the press release from Niceair’s board of directors stated:

These were in every way uncontrollable reasons. This closure is particularly tragic as there were good grounds and experience had shown that there was a basis for direct international flights through Akureyri“.

“We deeply regret the harm caused to the company’s customers, staff, suppliers and others affected. All claims will go to their legal channel”.

“After the company suffered major setbacks due to the non-compliance of its foreign partner Hi Fly, […] there were no more flights operated by the company and the company had no income, so the conditions for a recently completed financing round were broken and it was not possible to recall the share capital pledge. The company laid off all employees at the end of April”.

Akureyri Airport Iceland
Niceair operated from its base at Akureyri Airport in northern Iceland. © Simisa

Niceair – A Lot Of Turbulence In A Short Space Of Time

Niceair launched on 2nd June 2022, with the aim of bringing tourists from Europe to northern Iceland to capitalise on the country’s growing popularity over recent years and to encourage more travellers to visit the northern part of the island.

During its brief operating period, the airline operated flights from Akureyri Airport to Copenhagen, Denmark, and Tenerife, Spain, and plans were in place to expand the route network to include flights to and from Alicante, Spain, and Düsseldorf, Germany, which were scheduled to start in April and May of this year, respectively.

Unfortunately for Niceair, things have not been plain sailing (or rather flying) from the offset, with one example being when the airline was set to hit the skies for the first time in June 2022.

Shortly before its planned maiden trip, the airline cancelled all of its UK-bound flights due to confusion over flight authorisation to transport passengers between the two countries. At the time, the route was paused temporarily whilst clarity was sought on post-Brexit travel arrangements; in the end, however, services never resumed.

Have you ever flown with Niceair? Have you been affected by any of the airline’s cancellations in recent months? Let us know in the comments!

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Rachel Dunster
Rachel Dunster
Aviation Reporter