Icelandic carrier Niceair has ceased all operations due to a legal and financial dispute involving its subcontractor, HiFly.

Niceair launched in 2022 with the aim of connecting Akureyryi Airport (AEY) in Iceland with several destinations in Europe.

To keep costs low, Niceair subcontracted its operations to HiFly, which provided the aircraft and crew while Niceair managed marketing, distribution, and customer service. However, HiFly reportedly defaulted on its payments to the owner of the leased Airbus A319, resulting in the aircraft’s repossession and leaving Niceair without a plane to operate.

Niceair’s CEO claims that the airline was fulfilling all its financial obligations and that its load rates were satisfactory. The airline is currently seeking alternative ACMI providers, but it is unclear when services will resume.