Cargo Remains Key For Icelandair As Passenger Numbers Stay Low

Icelandair considers cargo operations to be an important part of its business model, especially in the current climate. The airline’s CEO, Bogi Nils Bogason, revealed that Icelandair cargo is a growing business and essential to a remote island community like Iceland.

Icelandair 757
Icelandair’s 757s are proving to be crucial to the airline while its MAX remain grounded. Photo: Getty Images

Icelandair passenger numbers are low

Speaking to CAPA Live this week, the CEO of Icelandair, Bogi Nils Bogason, explained that cargo operations are an essential part of the airline’s business model. This is especially pronounced now since Icelandair is operating a minimal number of flights out of its base in Keflavík International Airport in Reykjavik.

For example, today, Friday 11th December, there is only one Icelandair departure scheduled in Keflavík: a Boeing 767 departed for Copenhagen at 07:45 local time this morning. It will return later in the afternoon, as one of only two Icelandair passenger services arriving in the airport serving Iceland’s capital today. The other is a flight incoming from Boston.

Icelandair passenger to cargo
Icelandair wants Iceland to become a stronger cargo hub in the future, and it wants to be the airline to drive this development forward. Photo: Icelandair

Iceland to become a cargo hub?

Outlining Icelandair’s track record in cargo operations, Mr Bogason stated:

“Icelandair Cargo has been a profitable company for many years, and it has been growing its business.

“In 2019, we exported approximately 80 tonnes of cargo per day. It was mainly fresh fish to important markets for our seafood industry. And at the same time, we imported 40 tonnes of cargo per day in 2019.”

He also added,

“In a normal year, around two thirds of our freight is transported by utilising the belly space of the passenger network. And then we have, also, two dedicated freighters. But by using and putting emphasis on the belly space, we are of course, doing it in a more efficient and, we can say, environmentally friendly way.”

Furthermore, referencing both the importance of cargo for Iceland as an island country and for the airline’s positive impact on profits, Mr Bogason added:

“We see a lot of opportunities in the future for our cargo operations. And we want to strengthen Iceland as a cargo hub in the coming years.”

Icelandair passenger to cargo
Icelandair has converted its passenger aircraft to freighters. Photo: Icelandair

What has Icelandair been doing this year?

Icelandair has not had an easy year in 2020. Back when countries started entering coronavirus lockdowns, in March, the Icelandic government agreed fairly quickly to finance Icelandair for operating routes that were deemed key to the Icelandic economy. However, the airline still scaled back its capacity significantly. In July, the airline even threatened to fire all of its cabin crew.

To adapt to a different type of demand at the height of the crisis, the airline converted three of its four Boeing 767s from passenger to cargo aircraft. It is now reaping the benefits of its relatively successful weathering of the crisis – it is enjoying high investor confidence. It has had possibly the most successful equity raise of any airline this year.

What do you think of Icelandair’s response to the current crisis in the aviation industry? Let us know what you think of this story in the comments below.