Icelandic Airlines keeps booming, but can it last?

There’s been a staggering increase in passengers at Icelands Keflavik international. In July it passed one million passengers for the first time ever. That’s four times the population ot the country!

Back in 2008, Iceland went through a huge financial crisis, when all of the three major banks became insolvent and companies, individuals and (especially in the UK), local council governments, lost $5 billion. It was another nail in the coffin that led to the disaterous recession of 2009. In that year, all of Iceand recived just 1.9 million passengers.

icelandAir737mockup-620x350.jpg
IcelandAir will get 16 MAX 8 and 9’s in 2018-19

With the rise of WOW and the growth of IcelandAir, that number in 2017 is set to reach 7 million, well ahead of 2016’s 4.9 million.

This week, IcelandAir announced it was going to start flights to Cleveland – which hasn’t had a European link since 2009.

Both WOW and IcelandAir are bringing in a huge tourist market to Iceland, but it’s transit passengers that are really making the difference. IcelandAir’s capacity has grown from 1.9 million annual seats in 2009 to 5 million now, and with an order for 16 737 MAX 8 & 9’s starting to arrive through 2018 and 2019, an additional pair of 767’s already in service and no intention of winding down its 757 fleet (25×200’s and 1×300), IcelandAir seems set for continued growth.

e0017749291eae4a073cc5c475e03a6b38e53105.jpeg

WOW air is exqually as expansive, with A330’s in service and 3 A330-900neo on order – in some ways these have stolen a march on Icelandair. They use their A321/20 fleet to bring in transit passengers to Iceland and then ship them off to places further afield than Icelandair currently manages – SFO and LAX being but two examples.

airbus_a330neo_2_c_airbus_1024_-_kopie
WOW will get 3 A330Neo’s next year

The question however that hangs over them both, is can it really continue for many more years?

Lufthansa is set to grow Eurowings internationally, IAG has created LEVEL for the same purpose. AF-KLM has JOON, though I’m not convinced that’s really got legs as the whole concept seems a total nonsense. Meanwhile Nordic rivals Norwegian and their shell game of flags of convenience companies in Ireland, Norway, the UK and eslewhere are gearing up for direct flights and low cost options that potentially will render the need for a transit base even less desirable.

image.php.jpeg

And, if RyanAir gets hold of Alitalias A320/21 and A330 fleet, what’s to stop them operating in the longhaul environment? Frankly I think its something a strong and finacially viable brand like RyanAir is more than capable of pulling off, and it has the advantage of Dublin and Shannon both having US border clearance points before departure. That means passengers arrive as a domestic flight in the US, a major selling point.

In any event Icelandair and WOW hve vastly improved the economic landscape and recovery in their ultra-low population nation, and that’s no mean acheievement.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s