Longitudinal Intermediacy: Icelandair

Longitudinal Intermediacy Icelandair

Note: Also includes seasonal services.

Icelandair is a small airline company that carried around 3.44 million passengers in 2022, from a pre-pandemic peak of 4.4 million in 2019. Because of the convenient intermediary location of Reykjavik along the transatlantic Great Circle route, the airline has successfully established a pure long-distance hub-and-spoke system servicing mostly Northern Europe and nine North American cities. Scandinavian airports using Reykjavik to reach North America have a particularly low deviation. The same applies to western North American airports (Seattle, Denver, and Minneapolis), having a low deviation from Western European airports. Additionally, Scandinavian countries may not generate enough traffic to justify regular direct services to American airports, and using congested European hubs such as London, Paris, or Amsterdam involves higher deviation and the risk of delays. Therefore, the consolidation of traffic at Reykjavik becomes an effective business proposition.

Icelandair’s fleet of 43 aircraft is mainly composed of 757s, whose range of 7,700 km is sufficient to support its service pairs (the range of the aircraft goes beyond Anchorage, which is the longest service route). This fleet is being replaced by 737 Max 8 and 9 having a similar range and better fuel efficiency. Since the intermediacy offered by Icelandair connects the eastern and western parts of the Atlantic, it is labeled as longitudinal intermediacy (latitudinal intermediacy connects airports along a north/south range). Iceland is the only effective location for such a pan-Atlantic network as there are no other significant airports in the North Atlantic. It is expected that with the growth of economic activity along the Arctic Circle, the role of Iceland as an intermediary hub would be reinforced.