Icelandair has presented an ambitious expansion plan during the Capital Market Day, projecting its growth until the airline’s centenary in 2037. The plan includes opening new destinations, acquiring modern aircraft, and strengthening Reykjavik (KEF), Iceland, as a strategic hub connecting North America and Europe.
By 2024, Icelandair is expected to expand its air network to 57 destinations with three connection banks in Iceland, linking 17 cities in the United States and Canada with various locations in Europe.
The airline also offers exclusive holiday destinations for the Icelandic market, such as Tenerife, Alicante, Madrid, Verona, Salzburg, Innsbruck, and Rome, among others.
Despite this growth, Icelandair has improved both its load factors and unit revenues, which is a very positive sign that the market is «healing» from the years of international travel depression during COVID-19.
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More Passengers and More Aircraft
The company will reach 4.14 million passengers by the end of 2023, with 20-25% of them participating in the Stopover program, which encourages tourism in Iceland by allowing 1-7 day stopovers before continuing to their final destination. The goal is to increase this number to 8.5 million passengers by 2037, serving between 80 and 90 destinations.
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By the end of 2023, the fleet will consist of 43 aircraft, with a combination of Boeing 737 MAX, Boeing 757-200/-300, and Boeing 767-300 (ER) for international flights, and Q200/Q400 for domestic flights and to Greenland.
To increase passenger numbers, three Boeing 737 MAX 8 will be added in 2024, four Airbus A321neo (LR) in the summer of 2025, and thirteen Airbus A321neo (XLR) with an option for 12 additional aircraft with deliveries starting from 2029. Negotiations are ongoing with various lessors to acquire additional A321neo with delivery in 2026.
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New Icelandair Destinations for the 2030s?
Among the new destinations projected for after 2030 are Cancún (CUN), Mexico, and Havana (HAV), Cuba, operated by Airbus A321neo (XLR). Icelandair has previously ventured into these markets with charter flights for U.S. tour operators, participating in flights between the United States and Cuba in 2022 and operating routes from Detroit to Cancún in 2015 in partnership with Apple Vacations.
Additionally, the plan includes the possibility of reaching the U.S. West Coast, with destinations such as Las Vegas, Phoenix, San Francisco, and Los Angeles, as well as exploring the Gulf of Mexico with landings in Dallas/Fort Worth, Houston, and New Orleans. The opening of a link to Dubai is also being considered.
The Airbus A321neo (LR) will be used for flights to Western Canada and the Northwestern United States, replacing the Boeing 757-200 on current routes. The Boeing 737 MAX will focus on secondary routes on the East and Central United States coasts and much of the European market.
