Unique approach

Annual and Sustainability Report 2022

Unique approach

Our route network is the heart of our business model and Iceland’s unique geographical position provides us with significant strategic advantages, allowing us to efficiently serve our four markets – to, from, via and within Iceland. The running of the 24-hour hub at Keflavik Airport provides us with great flexibility to adapt our market emphasis to different conditions and the capability to serve a broad range of markets on both sides of the Atlantic in an efficient manner.

The utilization of Icelandair's fleet is one of the highest in the world as our aircraft can operate up to 19 hours within the 24-hour cycle by flying one return trip to Europe in the morning, then straight to North America in the afternoon, returning to Iceland the next morning.

Effective network management

Aligning the route network to reflect capacity, demand and the right flow within the network at any given time is crucial to ensure its performance and drive profitability. Given the complexity of the route network, we have implemented technical solutions that assist us in network optimization, scenario planning and fleet assignment as well as strengthened our team. This has allowed us to maximize the connecting potential that our diverse bank structure provides, resulting in a larger network, more destinations, higher frequency to key destinations and diverse departure times. In addition, we have focused on improving the connectivity between our international, domestic and regional networks.

The process for choosing a new destination is by no means set in stone. It is multi-dimensional and depends on many factors both external and internal. We perform various analyses of market size, fares, cost, network fit and operational requirements. To put it simply: what needs to hold true is that there is a market present that is underserved, and we see an opportunity to serve that market in a profitable way.

Ásdís Sveinsdóttir

Director Network Planning and Scheduling

Strong focus on revenue generation

Combating the high cost associated with operating a relatively small airline in international comparison from a connecting hub in Iceland, we have a strong focus on maximizing our revenue generation. Over the past years, we have built a robust infrastructure to ensure a profitable route network operation, including the following key factors:

Diverse product offering fitting our markets

Customer focus and personal service

Strong international brand

Ideal departure times at primary airports

Comprehensive sales and distribution channels

Beneficial partnerships

Extensive Sales Network

Icelandair has built an extensive sales network in all operating regions, in Iceland, Europe and North America. Our sales and distribution are comprehensive and diverse requiring a hands-on approach that has been developed over the years which continues to evolve over time. We rely heavily on strong relationships in the B2B market across our regions.

We have sales employees located in Europe and North America, in addition to our sales function in our headquarters in Reykjavik, Iceland. Within Europe, we have sales employees based in Copenhagen, London, Oslo, Stockholm, Paris, Frankfurt, Brussels and Amsterdam. Within our North America region, we have employees located in Boston, Denver, Seattle, New York and Rhode Island.

Revenue split by sales channel

Expanding our package services

In 2022, Icelandair began integrating the tour operator VITA into the Company‘s operations. The integration provides exciting new opportunities for package sales, with increased product selection and service to customers who prefer purchasing their whole trip in one package. In 2022, we joined forces and combined the knowledge of Icelandair and VITA employees, expanded Icelandair’s route network with destinations that were formerly available in charter flights and the selection of VITA tours was increased. The integration will continue into 2023, in the beginning of the year a new logo was introduced for Icelandair VITA and work will continue on technical updates to offer excellent service that will enhance the customer experience.

Reaching further through strong partnerships

Partnerships with other airlines allow us to expand our network even further, increase revenue and offer our customers extended connecting options and destinations. Throughout the years, we have developed bi-lateral partnerships with a range of airline partners both in Europe and North America.