Air Transport World

Moving up-market: no longer a single-class, low-fare airline, Icelandair has a new fleet, new European services and new Saga Class. (company profile)

No longer a single-class, low-fare airline, Icelandair has a new fleet, new European services and new Saga Class.

Reykjavik-Icelandair is still based in iceland. It seems, though, that little else about the airline has remained unchanged over the last few years. in rapid succession, the island nation's international carrier has revamped its fleet, cabin service and market emphasis. It has a new hub terminal and soon will have a new maintenance facility.

During the 1960s and 1970s, many a jeans-clad U.S. baby boomer saw Europe for the first time thanks to the low fares offered by Icelandic, which ignored IATA fare agreements. Icelandic merged into Icelandair in 1973.

There was single-class seating and limited amenities on board the CL-44s and later DC-8s leaving New York and other U.S. gateways. The passengers that they carried, bound for the Icelandair base in Luxembourg either directly or via Iceland, accounted for 65% of the airline's international traffic in 1974, with the icelandEurope markets making up the rest.

By the late 1 980s, the North Atlantic was a very different place for Icelandair. There were still plenty of North Americans eager to see Europe but by then, there were more carriers vying for their business, offering service from several new international gateways. Deregulation of U.S. airlines helped to heat up the competition and industry wide fare agreements were things of the past on the North Atlantic. At the same time, the demand for service between Iceland and Europe also was on the rise.

Icelandair responded by shifting its focus to the European routes. Last year's international traffic figures were nearly exactly the reverse of those in 1974, with icelandEurope passengers representing 68% and the rest flying transatlantic.

Under the bilateral agreement, Icelandair was entitled to five U.S. gateways but it cut back to three: New York, BaltimoreWashington and Orlando. Service was discontinued to Chicago and Boston; earlier there also had been service to Detroit. The bilateral permitted icelandair to operate half of its transatlantic flights as nonstops but with the change in strategy, all service from the U.S. was routed through Iceland. The international airport at Keflavik has become a true hub operation.

The expansion on the European side brought year-round service to each Scandinavian capital. Heisinki is served during the summer only. Luxembourg remains the primary European gateway but there is service from Keflavik to London, Glasgow, Paris, Frankfurt and Salzburg. Icelandair also provides a link to the Faeroe islands and to three destinations in Greenland. …

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