Esoteric route watch – the fourth of an occasional series

On 22nd July Icelandair launches a four-times weekly service from Reykjavik (KEF) to Seattle. Even in good times this might seem a little eccentric, but in the current downturn and with the airline’s home country financially devastated, “bonkers” might seem a better description. However there is a logic to the move which may yet give this route a rosy future.

First, despite the “kreppa” at home. Icelandair has a spring in its step at the moment. Most of its business is in dollars and euros and its exposure to the domestic crisis is limited. What’s more, the collapse of the Icelandic krona has boosted tourism to Iceland by making it a little more affordable. This is partially mitigating the slump in traffic being felt by airlines worldwide, Icelandair included. Further, Icelandair had the good fortune of being sold by the FL Group in 2006 – FL Group was one of the first casualties of last autumn’s collapse, being placed in administration in September 2008.

Most significantly, however, SAS Scandinavian Airlines has just dropped its Copenhagen-Seattle service after 40 years on the route. Despite flying the route for decades it was losing money because of increased competition from other European carriers, and using planes (A340s) that were far too big. Icelandair’s B757s will however provide a much better match to demand, and speedy connections at Reykjavik will actually save time for travellers previously transferring at Copenhagen.

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