[2] It operates scheduled services under the brand of its parent company, Icelandair, to domestic destinations across Iceland, Greenland and the Faroe Islands.

[7] In Akureyri, Tryggvi Helgason founded the airline Norðurflug; it was incorporated on 1 May 1995 as Flugfélag Norðurlands.

Subsequently, in 1997, Norðurlands merged with Flugleiðir's domestic operation under the name Flugfélag Íslands, branded as Air Iceland in English.

Services using the new aircraft included routes to Aberdeen which started in March 2016, and Belfast which began in June 2017, both flown out of Keflavík International Airport.

[10] In February 2018, Air Iceland Connect announced a strategy change by focusing on regional destinations.

[5][1] The company Air Iceland Connect continues to operate domestic flights under its own legal responsibility but using the Icelandair brand.