Atlantica - 01.06.2001, Page 11

Although its international flight operations
themselves are essentially the same as compa-
rable activities of other airlines, Icelandair is
completely different from other European play-
ers in terms of its marketing and customer base.
Most European airlines base their operations on
the business-travel market, which insists on
high-flight frequency and full flexibility in travel
arrangements, and is prepared to pay for the
privilege. In Icelandair's home market of
270,000 people, the business-travel segment is
simply not large enough to build up high-flight
frequency with a wide selection of gateways. In
fact, the company's total home market is so
small that operations based on business travel
alone would be extremely small and weak, with
little competitive edge.
Icelandair's vision has been to create interna-
tional passenger services on a scale which
ensures profitability and competitiveness.
Icelandair has made inroads into a larger inter-
national market, in the North Atlantic, and channels part of it through Iceland via the
Keflavík hub. Access to this large market has enabled the company to offer more
gateways on either side of the Atlantic, step up flight frequency to and from Iceland
and thereby increase service for its home market. This has created the foundation for
expanding within the Icelandic travel industry.
Guided by these principles, flight operations have expanded rapidly since 1993, at
first by adding aircraft to the fleet, but in the past two years by replacing smaller air-
craft with larger ones. Passenger traffic increased throughout the whole period, in
pace with the expanding operations. Around half of the increase in production was
sold in the North Atlantic market, and the other half in the market to and from
Iceland.
At the beginning of the growth period in 1993, the market to and from Iceland was
half its current size. Icelandair therefore took advantage of Iceland's geographical
position (on the shortest flight route between Northern Europe and North America)
to penetrate a larger market, and created a North Atlantic route network with a con-
nection hub in Iceland. The home market has benefited enormously from this build-
up in services. Travel to and from Iceland has grown by 60-85%, depending upon
season, in the space of less than a decade. Today, Iceland enjoys flight services on
three times the scale that the home and travel markets to Iceland could support by
themselves.
The Keflavík hub also allows Icelandair to operate code-shared services for SAS
between the Norwegian, Danish and Swedish capitals and Baltimore/Washington,
Boston, Minneapolis and Orlando, on a total of 12 routes. SAS thereby gains access
to Icelandair's route network. In return, Icelandair gains access to the most powerful
sales network in Scandinavia.
A T L A N T I C A 9
Sigurdur Helgason, President and CEO, Icelandair
ICELANDAIR IN-FLIGHT MAGAZINE
Head Office, Advertising:
Iceland Review
Sudurlandsbraut 12
IS-108 Reykjavík
Iceland
Tel. (354) 522 2000
Fax (354) 522 2022
iceland@icenews.is
www.icenews.is
Overseas Advertising
Representatives:
DENMARK:
Jungersted og Brostrøm
Allégade 8F
DK-2000 Frederiksberg
Denmark
Tel. (45) 33 22 20 20
Fax (45) 33 22 99 59
SWEDEN:
SAS Media AB
Gävlegatan 18 B
S-113 30 Stockholm
Sweden
Tel. (46) 8 797 03 00
Fax (46) 8 728 85 38
UK:
JB Nordic Media Ltd.
20-28 Dalling Road
Hammersmith
London W6 0JB
England
Tel. (44) 181 742 6644
Fax (44) 181 563 7026
BENELUX:
Media Partners
Stroombaan 4
NL-1181 VX Amstelveen
The Netherlands
Tel. (31) 20 547 3600
Fax (31) 20 647 5121
FRANCE:
Regie Club International (RCI)
Immeuble Europe Avenue
62 bis avenue André Morizet
F-92 643 Boulogne Billancourt cedex
France
Tel. (33) 1 55 60 88 13
Fax (33) 1 55 60 88 01
JAPAN:
U. I. Media Service Inc.
1-22-23-306
Ebisu, Shibuya-Ku
Tokyo 150
Japan
Tel. (81) 3 5449 4909
Fax (81) 3 5449 4907
An Airline with a Difference
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