Turnover of the air transport sector in Iceland 2009-2023
Aviation industry in Iceland
Considering the country's comparatively small size, Iceland has established itself as a relatively significant trans-Atlantic aviation hub due to its central location between North America and Europe. Using Iceland as a stop-over allows airlines to shorten flight times and operate trans-Atlantic routes with smaller, narrow-body airplanes.The aviation sector is responsible for a large percentage of the country's transport industry turnover. The remote nature of many of Iceland's towns and cities outside the capital area makes domestic flights an integral part of Iceland's transportation system, with over 665,500 domestic passengers recorded at Icelandic airports in 2022. Out of the thirteen airports in Iceland with scheduled flights, the largest airports for domestic travel are in Reykjavík and Akureyri. However, Iceland's leading international passenger and cargo hub is Keflavík International Airport—home of Iceland's largest airline, Icelandair. In 2023,international air passengers in Iceland outnumbered domestic passengers at a rate of more ten to one.
In addition to Icelandair, 27 other airlines have flights to and from Keflavík. The Icelandic low-cost carrier WOW air was also based at Keflavík Airport until it ceased trading in 2019, significantly impacting passenger numbers at the airport. A new low-cost carrier, PLAY, established itself in Iceland in 2019 and operated its first flight in 2021, looking to fill the gap in the market lef by WOW air. Among the predominantly European and North American airlines flying to the country, United Airlines and Scandinavian Airlines operate the largest number of flights to and from Iceland.