Icelandair

Flugfélag Íslands in the early decades

Icelandair traces its roots back to 1937, when Flugfélag Akureyrar was founded in Akureyri on the north coast of Iceland. Flight operations started in 1938 with a single Waco YKS-7 configured as a floatplane. In 1939 the airline was grounded when this aircraft was destroyed in a capsizing accident. The company moved to Reykjavík, where it acquired another Waco aircraft and was relaunched in 1940 as Flugfélag Íslands, which translates as Flight Company of Iceland. Previously, two unrelated airlines of the same name had existed in the country . For international purposes, the name Iceland Airways was adopted.The fleet was expanded with a Beechcraft Model 18 in 1942; and with two de Havilland Dragon Rapides and a Consolidated PBY Catalina in 1944, the latter being the first ever aircraft registered in Iceland to be flown to Iceland by an Icelandic crew from North America. On 11 July 1945, this aircraft operated the first commercial flight over the Atlantic Ocean for the airline, which led from Reykjavík to Largs in Scotland, with four passengers and four crew members on board. Regular flights to Prestwick Airport in Scotland and Copenhagen in Denmark, using Consolidated B-24 Liberator aircraft leased from Scottish Airlines were launched in 1946.In the same year, comfort and performance of domestic flights in Iceland could be improved with the introduction of the Douglas DC-3. A total of six were purchased, which remained in service with the airline until 1972. Until the late 1960s, Flugfélag concentrated mostly on domestic flights, where it initially faced fierce competition from Loftleiðir, another airline which had been founded in 1944. When a merger proposal of the Icelandic government was rejected by the two airlines, the domestic routes were split among them as a measure to ease competition. When Loftleiðir pulled out of the domestic market in 1952 to fully concentrate on international flights, Flugfélag became the main domestic carrier of the country.

International services stayed part of the business model of Flugfélag, though to a far lesser extent compared to Loftleiðir. In 1948, the Douglas DC-4 was introduced on those routes, and in 1957 two new Vickers 759 Viscounts were acquired, the first turboprop airliners to be operated by an Icelandic airline. In the 1950s, Flugfélag began to use the 'Icelandair' branding for its international flights.In 1967, Flugfélag was the first Icelandic airline to join the jet age, when a Boeing 727-100 dubbed Gullfaxi was put into service. Another 727 was acquired in 1971, and the aircraft type was operated until 1990. In 2008, the cockpit section of Gullfaxi was put on display at the Akureyri Aviation Museum.

Loftleiðir

Another company, Loftleiðir, called Icelandic Airlines internationally, had been formed in 1944 by three young pilots returning from their flight training in Canada. Their company, whose name roughly means "Skyways", concentrated on Icelandic domestic air services for the first few years. The first aircraft used were two Stinson Reliants, and then a Grumman Goose amphibious aircraft.

At first, Loftleiðir, like Flugfélag Íslands, concentrated on domestic air services. Loftleiðir began scheduled international operations in 1947.By 1952, the Icelandic authorities were very worried that fierce competition between both Icelandic airlines would ruin both companies, and attempted to force a merger between them. This did not happen at the time, but instead the authorities split up the domestic routes between the two airlines. As a result, Loftleiðir ceased domestic flights in Iceland entirely, concentrating instead on international flights. Loftleiðir's pioneering low-fare services across the North-Atlantic then commenced in 1953. In a way, Loftleiðir can even be considered a sort of precursor of the low-cost carriers that started popping up all over the globe in the 1970s, in particular the long-haul budget carrier like Norwegian Air Shuttle. This made it a popular airline for travel between Europe and North America.The late 1960s were an exciting time for Loftleiðir. In 1969 the company acquired International Air Bahama, a small airline operating Douglas DC-8 jet aircraft out of the Bahamas with transatlantic nonstop service between Nassau and Luxembourg, and a year later Loftleiðir became one of the founders of Cargolux, a cargo airline. Also in 1970, Loftleiðir entered the jet age with its first two Douglas DC-8 aircraft.During those years, Loftleiðir was often referred to, even by the company's own staff, as "the Hippie Airline" or even "the Hippie Express". Loftleiðir was not famous for speed or punctuality, but flying with the company became a sort of rite of passage for young "hippies" from America travelling to Europe, one of whom was future president of the United States Bill Clinton.

Merger with Loftleiðir

During the 1970s energy crisis, the economic situation for both Flugfélag Íslands and Loftleiðir worsened. The government of Iceland initiated a new attempt to merge the two airlines, which could be realized in 1973 following lengthy and difficult negotiations. In 1975, the Icelandic government provided a $13.5 million loan to Flugleiðir. The staff of Loftleiðir complained that Flugfélag Íslands, although smaller, had gained the upper hand in the united company. A holding company called Flugleiðir was created, which combined the two companies and began to streamline staff and operations. At the time of the merger, two thirds of the passenger traffic of the airline were international transatlantic crossings, and Flugfélag Íslands's fleet of Douglas DC-3s and Boeing 727s was enlarged by the Douglas DC-8s of Loftleiðir. In 1979, the two airlines Flugfélag Íslands and Loftleiðir merged into one airline Flugleiðir, and the airline was renamed Icelandair.

Post-merger Icelandair

In 1980, the Icelandic government provided a loan to Icelandair due to the company's bad financial situation.The aircraft fleet of Icelandair remained mainly unchanged until the Boeing 757-200 became the new backbone for transatlantic flights during the 1990s. The domestic Fokker F27s were replaced by Fokker 50s and Boeing 737s deployed on European routes. The European hub at Luxembourg Airport had been taken over from Loftleiðir. Passenger count topped one million in 1997 as the company's business grew on a reputation as a "backpacker airline", similar to Loftleiðir, which had been referred to as "Hippie Airline" since the late 1960s. In the same year, it was begun to dismantle the Luxembourg hub in favor of today's decentralized European network, linking the largest cities non-stop to Reykjavík, closing it down altogether by 1999.In 1997 the domestic operations of Icelandair, part of which had previously been operated under the 'Flugfélag Nordurlands' branding, were combined with small airline Nordurflug to form the Air Iceland Connect subsidiary, allowing mainline Icelandair to fully concentrate on international flights since then. On 20 November 1999, a new aircraft livery was introduced, as part of an image campaign designed to retire Icelandair's "backpacker" label in favor of an emphasis on business travel. From 2001, the Icelandair hub was moved to Keflavík International Airport. As Icelandair particularly focuses on flights to North America, the company was significantly affected by the airspace closure following the September 11 attacks in the same year.

The Flugleiðir holding was reorganized as Icelandair Group and FL Group between 2002 and 2005, with Icelandair becoming the largest and most important of eleven subsidiaries. The wet-lease and charter department, which was founded in 2003, was named Loftleiðir Icelandic, thus re-introducing a familiar name.

Developments since 2010

Like most Icelandic companies, Icelandair was hit quite hard by the 2008 financial crisis in the country, but was well on the road to recovery when another crisis of a very different kind hit in 2010. The air traffic restrictions following the 2010 eruptions of Eyjafjallajökull resulted in large parts of the European airspace being closed down. The air travel disruption coincided with the start of the important summer season for the company. The in-house crisis management organization began assessing the situation once the scale of the problem had become known. Thrice-daily crisis meetings were held at the airline's headquarters. Icelandair tried to operate as many passenger flights as possible, keeping its hub at Keflavík open and diverting European flights to airports that were still open. The eventual closure of Keflavík due to the volcanic ash cloud coincided with an improvement of the situation towards Europe, which allowed Icelandair to move its headquarters with 200 staff to Glasgow and operate flights from there for ten days, with shuttle flights to Iceland's Akureyri Airport and round-the-clock bus shuttles onwards to Reykjavík.

In the aftermath of the eruption, the government of Iceland launched the successful "Inspired by Iceland" campaign to regain confidence in travelling to Iceland for tourists and business people, of which Icelandair was a leading participant and initiator.When the Grímsvötn volcano erupted in 2011, Icelandair once again had to cope with airspace closures in Europe, though this time to a lesser extent due to a higher level of political preparedness. Weekly newspaper The Economist claimed that Icelandair could even take advantage when catering for disaster tourists.In February 2011 Icelandair was chosen "The Knowledge Company" of the year and Icelandair CEO Birkir Hólm Guðnason was picked as "Man of the Year" in the Icelandic business community. In both categories the panel of judges of the Association of Economists and Business Graduates in Iceland said that "the fine results of the company in the previous year showed both a high degree of skill and specialist knowledge within the company as well as excellent leadership." In October of the same year, the airline was awarded the title "Marketing Firm of the Year in Iceland", by a judging panel from IMARK, the Marketing Association in Iceland.

Further route expansion

After having launched scheduled flights to Washington, D.C., in 2011, Denver was announced as a new U.S. destination for 2012, followed by Anchorage in 2013, bringing the total number of cities served in the country up to eight, along with Boston, Minneapolis, New York City, Orlando and Seattle. Also in 2012, Icelandair resumed domestic services, with regular flights linking Akureyri to its Keflavík hub through subsidiary company Air Iceland.From 2009 to 2014, operations had doubled. New destinations in 2014 were Edmonton and Vancouver in Canada; and Geneva. Twice weekly flights to Vancouver commenced on 13 May 2014 and continued until October that year. Flights to Edmonton started on 4 March 2014, with a year-round service operating five times a week. The Geneva service started on 24 May 2014 and continued twice weekly until September.On 9 December 2014, Icelandair revealed a northern lights themed Boeing 757-200 named Hekla Aurora. The aircraft was officially launched in February 2015 as part of the company's #MyStopover campaign. The exterior, which was hand-painted by a team of highly skilled airbrush artists from the UK, features artwork depicting an Icelandic winter scene complete with the Aurora Borealis. An installation of LED mood lighting in the cabin continues the theme by emulating both the colours and dancing patterns of the aurora. As part of Icelandair's transatlantic fleet, the Hekla Aurora began operating to all of Icelandair's destinations at the time, and has a three-day advance schedule available for passengers and observers.On 5 February 2015, Birmingham became Icelandair's 5th gateway in the UK, and the 39th overall, with flights operating twice weekly, on Thursdays and Mondays. On 19 May 2015, Icelandair launched scheduled flights to and from Portland, Oregon in the US: its 14th destination in North America. Flights were set to operate twice weekly, on Tuesdays and Thursdays, until 20 October. Further expansion of Icelandair's global network was announced on 12 May 2015 with new, year-round services from Chicago O’Hare International Airport. Services commenced on 16 March 2016, with flights to Iceland operating four days a week. On 17 August 2015 Icelandair announced the augmentation of its global flight network with a new service between Keflavik and Aberdeen, the company's second Scottish destination. The new service, operated by Air Iceland Connect , commenced in March the following year, with flights scheduled four times per week.Icelandair commenced scheduled flights to Paris Orly Airport beginning on 29 March 2016. Services to Montreal Airport began on 26 May 2016. In September 2016, Icelandair announced services to Philadelphia, US, starting in May 2017 and Tampa, US starting in Sep 2017.In May 2017, Icelandair unveiled a glacier-themed special livery on Boeing 757-200 named Vatnajökull, the name of Europe's largest glacier. The special livery was created in order to commemorate Icelandair's 80th anniversary. In August 2017, Icelandair announced service five days per week to Cleveland, US, which began on 16 May 2018. The route was cut in early 2019. In August 2017, the Cape Verdean government signed an agreement with Loftleiðir Icelandic, part of the Icelandair Group, which turned the administration of TACV to the Icelandic group. The new administration plans include discontinue the hub at Praia International Airport focusing all of the airline's operations at Amílcar Cabral International Airport and from there serve as a connecting hub between the Americas, Europe and Africa. On 5 November 2017, the company Icelandair passed the first Boeing 757-200 to TACV to reinforce existing routes, such as daily flights to Lisbon, Fortaleza and Recife .

Since the 1960s, Icelandair has offered passengers travelling on transatlantic flights between North America and Europe an opportunity to stopover in Iceland for up to seven days, at no additional cost. In order to raise awareness about its stopover offer, the company launched a new social media initiative in 2014, with the hashtag #MyStopover.On 9 January 2018, Icelandair announced that it would provide three non-stop flights a week from Kansas City International Airport to Keflavík International Airport, which commenced on 25 May 2018. Icelandair commenced four weekly flights to and from Dallas Ft. Worth on 30 May 2018. It ended on 6 March 2019. On 5 November 2018, Icelandair announced plans to take over its low-cost competitor, WOW air, with the two airlines to be operated as separate brands. On 29 November, Icelandair abandoned this endeavour as the shareholders’ meeting pre-conditions were unlikely to be met.On 18 September 2020, the company´s share capital was increased with the issue of 23,000,000,000 new shares with nominal value of 1 Icelandic króna following a public share offering. In addition the Icelandic government decided to guarantee a line of credit for Icelandair. The guarantee amounts to $120 million.On 9 March 2021, Icelandair Group announced that Air Iceland Connect is to merge with Icelandair by uniting domestic and international services from 16 March 2021 and continuing the current flight operations under Icelandair brand.