Atlantic Airways’ board of directors has made a DKr71 million ($13 million) cash offer to acquire all shares held by private investors in the airline.
Two-thirds of the carrier is owned by the Faroe Islands’ government.
If the bid is successful, Atlantic Airways will be delisted from the stock exchanges in Copenhagen and Reykjavik.
The Faroese government sold a 33% stake to private investors in 2007.
The buyback is also subject to various amendments of existing Faroese law as well as shareholder approval.
Atlantic Airways operates three Airbus A319s and a BAE Systems Avro RJ100 on scheduled flights across Scandinavia and mainland Europe. It recently agreed to lease its RJ100 to Malmo Aviation for a period of 17 to 30 months, effective the end of August 2014.