History of Iceland

Icelandair traces its roots to 1937 when Flugfélag Akureyrar was founded in Akureyri on the north coast of Iceland. Operations started in 1938 with a Waco YKS-7 floatplane. In 1940, the company moved its headquarters to Reykjavík and changed its name to Flugfélag Íslands. A company called Loftleiðir had been formed by three pilots in 1944. Initially, Loftleiðir and Flugfélag Íslands concentrated on Icelandic domestic air services.

In 1945, Flugfélag Íslands (Iceland Airways Ltd) made its first international flights to Scotland and Denmark. International services were commenced in 1946 with converted B-24 Liberator aircraft leased from Scottish Airways. Loftleiðir began scheduled international operations in 1947 and from 1948 used Douglas DC-4 Skymasters. Its pioneering low-fare services across the North-Atlantic commenced in 1953. At the time, IATA determined the fares for airlines flying between Europe and North America, and all airlines charged the same amount. Loftleiðir was not a part of IATA and could, therefore, determine its own fares, undercutting all competing airlines. This made them a popular hub for travel between Europe and North America.