Aviation History
Iceland's aviation history began with a short-lived 1919 sightseeing airline, but sustained development started in 1937 with the carrier that became Flugfélag Íslands, followed in 1944 by Loftleiðir, later famous for pioneering low-fare transatlantic travel. Iceland's mid-Atlantic location made it a strategic refueling stop, reinforced by Keflavík Airport, built by Allied forces during World War II and later Iceland's main international gateway. Financial pressures during the 1970s energy crisis pushed Flugfélag Íslands and Loftleiðir to merge, forming Icelandair by 1979. Since then Icelandair has run a transatlantic hub-and-spoke network through Keflavík, weathering the 2008 financial crisis and the 2010 Eyjafjallajökull eruption, while newer low-cost entrants such as WOW air and PLAY have tried to revive Loftleiðir's cheap-fares model with mixed success.
Flugfélag Íslands, Iceland's first airline, flew an Avro 504K biplane on sightseeing flights starting in September 1919 but folded within about a year.
Flugfélag Akureyrar was founded with a single seaplane; it relocated to Reykjavík in 1940 and was renamed Flugfélag Íslands, a direct ancestor of modern Icelandair.
Three Icelandic pilots who had trained in Canada founded Loftleiðir, which would later become known for pioneering low-fare transatlantic service.
Flugfélag Íslands operated one of Iceland's first scheduled postwar flights to Europe, from Reykjavík to Scotland, opening regular international connections.
Keflavík Airport originated as a base constructed by Allied (later US) forces during World War II and eventually became Iceland's principal international gateway.
Flugfélag Íslands and Loftleiðir, which had merged under the holding company Flugleiðir earlier in the 1970s amid the energy crisis, formally combined operations under the Icelandair name.
The eruption of the Eyjafjallajökull volcano closed large parts of European airspace for days, briefly forcing Icelandair to operate from Glasgow instead of Keflavík.
Budget carrier WOW air, which had expanded rapidly on low-fare transatlantic routes through Keflavík, collapsed financially and shut down.
A new low-cost carrier, PLAY, launched transatlantic service through Keflavík, continuing Iceland's long-running low-fare stopover model.
Icelandair · Loftleiðir (historical) · WOW air (historical) · PLAY · Air Iceland Connect (historical)
General public/encyclopedic sources (Wikipedia, Icelandair corporate history); recent items such as PLAY's route network and Icelandair's headquarters details are more time-sensitive and should be reverified.