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| Founded | 1944 | |||
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| Ceased operations | 1979 (merged in 1973 with Flugfélag Íslands to form Icelandair) |
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| Hubs | Reykjavík Airport | |||
| Focus cities | New York City Airport Luxembourg Airport |
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| Destinations | ||||
| Headquarters | Reykjavík, Iceland | |||
| Key people | Kristjan Gudlaugsson (Chairman, 1970) Sigurdur Helgason (strategist, from 1953) Alfred Eliasson (co-founder) |
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Loftleiðir HF, internationally known as Icelandic Airlines (abbreviated IAL) or Loftleiðir Icelandic,[1] was a private Icelandic airline headquartered on the grounds of Reykjavík Airport in Reykjavík,[2] which operated mostly trans-atlantic flights linking Europe and America, pioneering the low-cost flight business strategy on these routes.
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Loftleiðir (the name being a compound of the Icelandic words for Air and Way) was founded on 10 March 1944, by Alfred Eliasson and two other young Icelandic pilots who had just returned from flight training in Canada. The first revenue flight (from Reykjavík to Ísafjörður) took place on 6 April of that year.[3] During the initial years, only domestic routes out of Reykjavík Airport were operated using airplanes of the types Douglas DC-3, Consolidated PBY Catalina, Stinson Reliant, Grumman Goose,[3] Noorduyn Norseman, Avro Anson and Vultee L-1 Vigilant.[4] The first international flight (from Reykjavík to Copenhagen) using a Douglas DC-4 took place on 17 June 1947, the Icelandic National Day. Loftleiðir had expected to take delivery of the DC-4 already in 1946 (the first Icelandic airline to operate an airliner of that size and range), but the delivery was delayed because of the bankruptcy of the interior outfitter.[3] Initially, the DC-4 was deployed on flights to Europe, as well as on chartered flights for third party companies, for example from Britain to South America.[3]
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.[5] In 1949 and 1950, the DC-4s were leased to U.S. carrier Seaboard & Western Airlines because of the difficult financial situation Loftleiðir was in during that period.[3]
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.[6] Typical routings at that time where from New York via Reykjavík to Hamburg or Luxembourg, with intermediate stops at Oslo, Copenhagen, Bergen, Stavanger or Gothenburg.[7]
From 1955 onwards, Luxembourg-Findel Airport was the European starting point for most of Loftleiðir's transatlantic flights.[8] With the introduction of the Douglas DC-6 into the fleet in 1959, the DC-4s were gradually phased out.[9] In 1964, Loftleiðir began to operate the Canadair CL-44, the only airline to use this aircraft type for passenger flights (which had been stretched to fit the demands of the airline).[10] With a capacity of 189 passengers, the CL-44 was the largest airplane used for scheduled transatlantic flights in those years.[11] Loftleiðir joined the jet age in 1970, when the Douglas DC-8 was put into service with the airline.[12][6] At that time, the company had 1,000 employees.[6]
The growing competition from Flugfélag Íslands and the economical pressure during the 1970s energy crisis let to the merger of the two airlines in 1973 into one holding company, which was called Flugleiðir. In 1979, Flugfélag Íslands acquired all assets of Loftleiðir, and the airline became known as Icelandair.[13]
The Loftleidir branding re-emerged in 2003, when the newly created wet-lease and charter subsidiary of Icelandair Group was named Loftleidir Icelandic.[14]
The geographical position of Iceland in the Atlantic Ocean between Europe and America allowed Loftleiðir to offer passenger flights between the two continents with an intermediate stop at its home airport at Reykjavík, thus operating at lower costs because of easier aircraft and crew logistics than its European or American competitors. The airline was chosen by many young Americans as a cheap means of travel to Europe, which earned it the title Hippie Airline from the late 1960s. During different state visits to Iceland, Bill and Hillary Clinton both remembered the experience of their flights with Loftleiðir.[15]
In order to comply with 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 only allowed to transport passengers to and from its country of registry), but stopovers were held as short as one hour, with no changing of the aircraft required.[7] 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.[16] Sigurdur Helgason, who had joined the board of the airline in 1953, is credited to have introduced this strategy. The New York Times called him a "low-cost travel pioneer."[17]
Between 1952 and 1962, Loftleiðir co-operated with Braathens, an airline from Norway, on the transatlantic routes on a codeshare-like basis, as well as concerning aircraft maintenance.[18] When the European focus shifted from Scandinavia to Luxemburg, this partnership was terminated. Air Bahama, a small airline from the Bahamas, was acquired in 1969.[6] In 1970, Loftleiðir became one of the founding shareholders of Cargolux, along with Luxair and several private investors.
Over the years, the following aircraft types were operated:[19]
| Aircraft | Introduced | Retired |
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| Avro Anson | ||
| Canadair CL-44 |
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| Douglas DC-3 Douglas C-54 Skymaster |
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| Douglas DC-4 |
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| Douglas DC-6 |
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| Douglas DC-8 |
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| Grumman Goose |
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| Noorduyn Norseman | ||
| Stinson Reliant |
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| Vultee L-1 Vigilant |