Demand is strong and growing for all destinations within Iceland and in Greenland.”
Air Iceland is a market-driven service company offering eight scheduled domestic destinations as well as routes from Iceland to the Faeroe Islands and Greenland.
In total, around 380,000 passengers were carried on Air Iceland flights in 2006, an increase of 7.4% from 2005, which is more than ever in the history of the company. The total turnover of the company increased by 18% in 2006 from the previous year, and the company is showing positive results for the 5th year in a row. About 90% of the company‘s passenger traffic on scheduled flights is on the routes between Reykjavík, Akureyri, Ísafjördur and Egilsstadir. In October, Air Iceland signed a 10-month contract with the Icelandic government for flights between Reykjavík and Vestmannaeyjar.
Air Iceland purchased two 37 seated DASH 8 aircraft in 2006, which are primarily used for the further development of the operation to/from and within Greenland. Following a contract with Arctic Travel Group, Air Iceland operated an extensive schedule from the beginning of June until mid-September between Iceland and Greenland including flights within Greenland between Nuuk, Kangerlussuaq and Ilulissat. The newly purchased DASH 8 aircraft give Air Iceland a full new range of opportunities on flights within Greenland, as these aircraft are able to use very short runways and can be converted for cargo work. At the beginning of 2006, Air Iceland started up a new operation under a 5-year contract with Greenland‘s home rule government covering flights between Reykjavík and Kulusuk and Constable Point.
In 2006, flight operations were continued to the Faeroe Islands in co-operation with Atlantic Airways. In October, Air Iceland entered into a 6-month lease contract with the Maltese company Medavia for the operation of one DASH 8 aircraft in Libya. This contract is a lucrative addition to the winter operation of Air Iceland, as it helps to even out seasonality in the operation. In 2004, the company acquired three Fokker 50 aircraft and today has six such aircraft in operation. With the two DASH 8 aircraft and the two smaller DHC-6/Twin Otters the company’s fleet consists of 10 aircraft.
Air Iceland holds a very strong position on the Icelandic domestic market and has operated with very good profits over the past few years. With the strong economy and large-scale industrial projects in East Iceland, demand has been high on Air Iceland’s main routes. With around 80% of Air Iceland’s customers having purchased their trips on the company website, Air Iceland has reaped benefits from its extremely effective distribution system, which is important in a competitive environment where time and money play a significant role in customers’ decisions.
Air Iceland plans to grow and increase its profitability by offering the Icelandic market, and the tourism market in Iceland and Greenland, the best possible service. Demand is strong and growing for all destinations within Iceland and in Greenland. In 2007, Air Iceland will for the first time operate, in cooperation with Icelandair, a direct flight from Akureyri to Icelandair’s main hub, Keflavik, which will give connecting passengers a fast and efficient transfer to most of Icelandair’s international destinations. Additionally, Air Iceland will offer a new link from Keflavik directly to the capital of Greenland, Nuuk. These flights will be operated on DASH 8 aircraft, three times a week during the summer period.