Iceland’s fourth largest pension fund, Birta Pension Fund, has defended its ISK 1.7bn investment loss in the Icelandic budget airline Fly Play, which entered into administration this week (29 September).

In a statement on its website, the pension fund, which has a membership of mostly tradespeople, said it had previously written down its ISK 1.7bn investment to ISK 196m due to the value of the airline’s share capital reducing.

Furthermore, the fund noted that its initial investment equated to just 0.25 per cent of its total ISK 696bn in assets under management, as of 31 December 2024.

It stressed that a large part of the fund's losses relating to Fly Play occurred earlier this year and, therefore, the company's bankruptcy has had a “negligible impact on this year's results and the fund's ability to pay pensions”.

Indeed, Birta’s remaining assets in the airline amounted to 0.02 per cent of the pension fund’s total assets at the beginning of the year. It confirmed that its holding has now been written down to zero as a result of the company’s collapse.

In defending its decision to invest in the company, the fund stated that it is “aware that there has been a lot of hype surrounding Fly Play”, noting that the “operational risk is greater than is the case with other companies in which the fund holds a stake”.

“In this regard, the fund points out that the risk was limited to the share of total assets as stated above. Although Birta Pension Fund was among the airline's largest shareholders, the fund's investment in Fly Play was a small percentage of its assets,” it said.

Birta Pension Fund’s board and staff also expressed “deep disappointment” with the situation and said their thoughts were with Fly Play’s employees and customers.

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