Icelandair Expands its London Offering

Icelandair is to increase its capacity in the London market this coming winter but like so many airlines currently serving London Heathrow it has had to open up a second terminus in the UK capital to support its growth ambitions. The carrier already provides a double daily operation between Keflvaik International Airport, which serves the Icelandic capital Reykjavik, and London Heathrow. From October 28, 2012 it will introduce an additional two weekly rotations into London Gatwick, operating every Thursday and Sunday through the Northern Winter schedule. Alongside its flights to London, the carrier also offers links to Glasgow and Manchester.

Icelandair actually held a monopoly on direct scheduled flights between the countries during the 1980s and 1990s but this was broken in May 2000 by the former low-cost operator Go, which was later acquired by easyJet. Go introduced a regular link to Keflavik from London Stansted during summer 2000, with flights operating between May and September that year. It repeated the formula in 2001, extending the operations from April to October, but then suspended the route.

It was February 2004 before Icelandair again found itself with direct competition between the two countries as budget carrier Iceland Express entered the marketplace serving London Stansted, followed by British Airways serving London Gatwick from March 2006. Flyglobespan brought additional competition in 2007 with direct links from Glasgow and Manchester between July and September. British Airways ended its flights from London Gatwick in March 2008 and Iceland Express subsequently switched its own operations to the airport from London Stansted. In June 2011, Edinburgh became the latest UK destination to enjoy direct flights to Keflavik International when Iceland Express inaugurated flights for a three month period.

In the table below we look in greater detail at Icelandair’s schedule between Iceland and the UK over the past five years and how it has seen its own share of capacity decline due to increasing competition.

The arrival of two new entrants into the Iceland – UK market this year is likely to further enhance competition between the two countries. Alongside Icelandair and the budget carrier Iceland Express, easyJet will launch its first flights between the islands with a three times weekly link from London Luton on March 27, 2012, while start-up WOW Air will introduce a three times weekly London Stansted operation from June 2012.

This year there are scheduled to be more than 1,783 flights between Iceland and the UK offering over 310,000 seats in each direction. This represents a 7.2 per cent decline on last year. In 2011 an estimated 371,000 O&D passengers travelled between Iceland and the UK, a market that has grown by a quarter in the past year but during which time Icelandair’s own share of the traffic has slipped by around a fifth to 57.7 per cent.