When you hear that an Icelandic airline is in trouble, you immediately think of ultra-low-cost airline WOW Air. But this time it seems Icelandair is in now the one in crosshairs as they suffer a $55.5 million USD loss.
This has spurred a refocus by the executive team, who are now looking at pivoting the airline away from the cutthroat business of trans-Atlantic travel, and towards aircraft leasing.
What are the details?
As part of the company rescrutctuing, Icelandair will split into four connected departments each focusing on a different area of buisness. They are:
- Operations (Passenger flights and other operational activities)
- Sales and Customer Experience (Marketing and actually selling tickets)
- Air Freight and Logistics
- And the new fourth department – Aircraft Leasing and Consulting.
Originally aircraft leasing was split amoung frieght and operations, depending on weither it was for cargo or passenger services. With its own department/company (dubbed Loftleidir Icelandic), it will be able to focus on actually getting business in a very lucrative marketplace.
“Loftleidir Icelandic currently uses Icelandair Group’s expertise, experience and operating resources to provide charter and consulting services to airline operators around the world. Furthermore, the Company contributes to reducing seasonal fluctuations within Icelandair Group’s operations. The Company has consistently performed well over the years and Icelandair Group intends to strengthen this business further,” – Statement from Icelandair
As part of the restructure, they will also be looking at expanding air freight to new markets, and putting their tour operator and tour sales company Iceland Travel, up for sale. They may also trial futher integration of their smaller short-haul arm, Icelandair Connect.
“This will make us better equipped to adapt to the constantly changing operating environment and take advantage of future opportunities. Increased emphasis on digitization, development of our fleet and route network, as well as air freight and our leasing business, will also strengthen our competitive advantage,” – CEO Bogi Nils Bogason
The iceland aviation marketplace is a tough one. With such a small population and an almost non-existant domestic marketplace, one might suspect that Iceland could not possibly support its own airline, yet alone two. But because of its stratetic location, Iceland can actually facilitate super cheap routes on small planes across the atlantic.
It remains to be seen if this is enought to save Icelandair from the same fate as its cusion WOW Air.
What do you think? Let us know in the comments.