Icelandair began in 1937 using the name Flugfelag Akureyrar, based primarily in the northern city of Akureyri. In 1943 the airline moved its base to the country's capital of Reykjav�k and changed its name to Flugfelag Islands.
In 1944, a competitor appeared - Loftlei�ir, also known as Icelandic Airlines. In 1945, Flugf�lag �slands became the first Icelandic air company to fly international flights, when service was inaugurated to Largs in Scotland, using a Consolidated Catalina flying boat. In 1947, Loftlei�ir followed suit, starting their own international flights. In 1953, Loftlei�ir became the first Icelandic company to fly transatlantic flights from Iceland.
Competition continued until 1973, when the two airlines merged. At first, the name adopted was Fluglei�ir, a hybrid of the two old names. In 1979 the name was changed to Icelandair but Fluglei�ir was kept for domestic advertising.
Today, Icelandair is Iceland's biggest carrier and the only one on most routes but the low-fares airline Iceland Express started competing with Icelandair on two routes in 2003, from Keflav�k to Copenhagen and London.
Most of the air traffic from the United States to Europe and vice versa flies over Iceland. Icelandair has used this to their advantage and accordingly made Iceland a transfer point for people travelling from the U.S. to Europe and vice versa. This accounts for about 50 percent of the companies passenger traffic. Icelandair offers stopover packages in Iceland on its transatlantic flights at no extra cost.
Icelandair is one of the 13 subsidiaries of FL Group (formerly named the Flugleidir Icelandair Group). The Group is central to the rapidly growing Icelandic tourist industry, and includes Icelandair, Icelandair Cargo, Icelandair Hotels, Air Iceland, Iceland Travel, Reykjavik Excursions, Icelandair/Hertz, Icelandair Ground Services, Icelandair Technical Services, Loftleidir-Icelandic and Icelandair Shared Services. In addition, Icelandair holds a 10.1% stake in British "no-frills" carrier easyJet.
Destinations served from Iceland:
- Glasgow, United Kingdom (Glasgow International Airport)
- London, United Kingdom (London Heathrow Airport)
- Amsterdam, Netherlands (Schiphol Airport)
- Paris, France (Charles De Gaulle International Airport)
- Oslo, Norway (Oslo Airport)
- Copenhagen, Denmark (Copenhagen Airport)
- Stockholm, Sweden (Arlanda Airport)
- Helsinki, Finland (Helsinki-Vantaa Airport)
- Berlin, Germany (Tegel International Airport)
- Frankfurt, Germany (Frankfurt International Airport)
- Munich, Germany (Munich International Airport)
- Zurich, Switzerland (Zurich International Airport)
- Milan, Italy (Malpensa International Airport)
- Madrid, Spain (Barajas International Airport)
- Barcelona, Spain (El Prat International Airport)
- Boston, USA (Logan International Airport)
- New York City, USA (John F. Kennedy International Airport)
- Baltimore/Washington, DC, USA (Baltimore-Washington International Airport)
- Orlando, USA (Orlando International Airport)
- Minneapolis-St. Paul, USA (Minneapolis-Saint Paul International Airport)
- San Francisco, USA (San Francisco International Airport)
The airline is expanding into charter services with a new company that reuses the old name Loftlei�ir. Loftlei�ir Icelandic is now operating 5 Boeing 757-200s and three Boeing 767-300s. The company has 15 Boeing 737-800s on order These aircraft will be leased to other companies.
The Icelandair fleet consists of the following aircraft (at April 2005):
- Icelandair Fleet Detail
- Icelandair Passenger Opinionsis:Icelandair
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