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Loftleiðir (, ), internationally known as Icelandic Airlines (abbreviated IAL) or Loftleiðir Icelandic, was a private airline headquartered on the grounds of Reykjavík Airport in Reykjavík,"World Airline Directory." Flight International. 13 April 1967. 578. " Head Office: Reykjavík Airport, Iceland." which operated mostly trans-Atlantic flights linking Europe and America, pioneering the Low-cost carrier business strategy on these routes.
In 2003, the name Loftleiðir Icelandic made a comeback to service the skies as Icelandair's aircraft lease and charter flights provider.
In 1948, Loftleiðir was granted governmental approval to operate passenger services to the United States of America, which were launched in August of that year when a second DC-4 joined the fleet, with New York's Idlewild Airport as first destination. In 1949 and 1950, the DC-4s were aircraft lease to U.S. carrier Seaboard & Western Airlines because of the difficult financial situation Loftleiðir was in during that period.
Since Loftleiðir had launched domestic flights in the 1940s, there had been a fierce competition with Flugfélag Íslands, which had prompted the Icelandic government to divide the network between the two airlines, when the originally proposed merger had been rejected. The management of Loftleiðir claimed to have been disfavoured in this measure, and decided to cease all domestic services in 1952, fully concentrating on transatlantic flights henceforth. Typical routings at that time were from New York via Reykjavík to Hamburg or Luxembourg, with intermediate stops at Oslo, Copenhagen, Bergen, Stavanger or Gothenburg.
From 1955 onwards, Luxembourg-Findel Airport was the European starting point for most of Loftleiðir's transatlantic flights. With the introduction of the Douglas DC-6 into the fleet in 1959, the DC-4s were gradually phased out. History of Loftleiðir's flights out of Luxembourg-Findel Airport at knol.google.com
In 1964, Loftleiðir started operating its first Canadair CL-44D-4, and two years later the first of its four CL-44Js, a variant of the CL-44D4 stretched on request by Canadair. Loftleiðir was the only passenger operator of the turboprop, which was used as a cargo plane by other airlines. It was the largest passenger aircraft flying over the Atlantic Ocean at that time, carrying up to 189 passengers. Loftleiðir marketed the CL-44J under the name "Rolls-Royce 400 PropJet". This led to the confusion that the CL-44J is sometimes referred to as the Canadair-400. At that time, the company had 1,000 employees.
The late sixties were an exciting time for Loftleiðir. In 1969, the company acquired International Air Bahama, a small airline operating Boeing 707 jets out of the Bahamas, and a year later, Loftleiðir became one of the founders of Cargolux, a thriving cargo airline. Also in 1970, Loftleiðir entered the jet age with its first two stretched Douglas DC-8-63 "Super DC-8" jetliners. In 1971, the company started flying between Iceland and Scandinavia with the slightly smaller DC-8-55.
The growing competition from Flugfélag Íslands and the economic pressure during the 1970s energy crisis led to the merger of the two airlines in 1973 into one holding company, which was called Stodir. In 1979, Flugfélag Íslands and Loftleiðir merged into a new airline, also called Flugleiðir, which later became known as Icelandair.
The Loftleiðir branding re-emerged in 2003, when the newly created aircraft lease and charter subsidiary of Icelandair Group was named Loftleiðir Icelandic.
In order to comply with the then-valid freedoms of the air restrictions, tickets for transatlantic flights were issued in two parts (to/from Iceland, as Loftleiðir, as an Icelandic airline, was allowed to transport passengers only to and from its country of registry), but stopovers were held as short as one hour, with no changing of the aircraft required. Because Loftleiðir had not joined the International Air Transport Association (IATA), which at that time defined the fares for its member airlines on transatlantic routes, it could offer considerably lower ticket prices. Sigurður Helgason, who had joined the board of the airline in 1953, is credited with introducing this strategy. The New York Times called him a "Low-cost carrier pioneer."
International Air Bahama, a small airline based in the Bahamas operating transatlantic Boeing 707 jet service between Nassau and Luxembourg, was acquired in 1969 with International Air Bahama subsequently operating stretched Super Douglas DC-8 jetliners on its transatlantic flights.
In 1970, Loftleiðir became one of the founding shareholders of Cargolux, along with Luxair and several private investors.
| Avro Anson | ||
| Canadair CL-44 | ||
| Douglas DC-3 | ||
| Douglas DC-4 / Douglas C-54 | ||
| Douglas DC-6 | ||
| Douglas DC-8 (including DC-8-55 and Super DC-8-63) | ||
| Grumman Goose | ||
| Noorduyn Norseman | ||
| Stinson Reliant | ||
| Vultee L-1 Vigilant | ||
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