Aviation industry in Iceland - statistics & facts
Iceland is known as the land of fire and ice for its volcanoes and glaciers, which bring a lot of international tourists to the country. As a remote island in the North Atlantic, Iceland relies heavily on its aviation industry to bring tourists to the country, providing the main international transport connections for people living there and connecting remote parts of the country. In addition, to travel to, from, and within Iceland, the leading international airport in the country, Keflavík International Airport, serves as a hub for transatlantic travel. Due to the island’s location mid-way between the European and the North American continent, several air carriers provide flights to their passengers via Iceland. The shorter flights between Iceland and destinations in Europe and North America allow airlines to use smaller single-aisle planes than on transatlantic flights.
However, international air passenger travel in Iceland has seen several challenging years. Even prior to the start of the COVID-19 pandemic, the country had experienced a substantial fall in passengers. This was largely due to the collapse of the low-cost carrier Wow Air, which had been based at Keflavík Airport and had provided transatlantic connections via Iceland. Passenger numbers fell further during the COVID-19 pandemic, reaching as low as 1.4 million in 2020 but returning to around 7.9 million in 2023. However, this was still well below pre-pandemic year’s approximately 9.9 million passengers.
Icelandair has a new competitor on its international connections from a new Iceland-based low-cost airline, Fly Play. Fly Play was founded in 2019 and began operations in 2021. Its hub is at Keflavik Airport, which is the largest airport in Iceland. In 2023, the airline flew 1.5 million passengers on routes between Iceland, Europe, and the East Coast of North America.
However, international air passenger travel in Iceland has seen several challenging years. Even prior to the start of the COVID-19 pandemic, the country had experienced a substantial fall in passengers. This was largely due to the collapse of the low-cost carrier Wow Air, which had been based at Keflavík Airport and had provided transatlantic connections via Iceland. Passenger numbers fell further during the COVID-19 pandemic, reaching as low as 1.4 million in 2020 but returning to around 7.9 million in 2023. However, this was still well below pre-pandemic year’s approximately 9.9 million passengers.
Leading companies in the Icelandic aviation industry
Icelandair Group, the parent company of Icelandair, was the most significant airline operating in Iceland, reporting a market share of 15.6 percent in 2023. They were followed by United Airlines, who had a share of 5.5 percent. In the same period, Icelandair Gorup reported an operating income of 1.5 billion U.S. dollars, a sharp increase compared to the previous year. The airline also saw a significant increase in passenger traffic, with 4.3 million passengers in 2023.Icelandair has a new competitor on its international connections from a new Iceland-based low-cost airline, Fly Play. Fly Play was founded in 2019 and began operations in 2021. Its hub is at Keflavik Airport, which is the largest airport in Iceland. In 2023, the airline flew 1.5 million passengers on routes between Iceland, Europe, and the East Coast of North America.
