[4] It is part of the Icelandair Group and operates to destinations on both sides of the Atlantic Ocean from its main hub at Keflavík International Airport.

[5] The geographical position of Iceland is convenient for one-stop transatlantic flights via the Atlantic Bridge route, which is one pillar of the airline's business strategy, along with traffic to, from, and within the country.

[6] Icelandair traces its roots back to 1937, when Flugfélag Akureyrar was founded in Akureyri on the north coast of Iceland.

[12] Iceland Airways (Icelandair) inherited a small building constructed by the British Army on the west side of the airport.

[14] On 11 July 1945, this aircraft operated the first commercial flight over the Atlantic Ocean for the airline, which led from Reykjavík to Largs in Scotland, with four passengers and four crew members on board.

Regular flights to Prestwick Airport in Scotland and Copenhagen in Denmark, using Consolidated B-24 Liberator aircraft leased from Scottish Airlines were launched in 1946.

[11] In 1967, Flugfélag was the first Icelandic airline to join the jet age, when a Boeing 727-100 dubbed Gullfaxi was put into service.

[18] Another company, Loftleiðir, called Icelandic Airlines internationally, was formed in 1944 by three young pilots returning from their flight training in Canada.

The company, whose name roughly means "Skyways", initially concentrated on Icelandic domestic routes using two Stinson Reliants and then a Grumman G-21 Goose[19] amphibious aircraft.

Loftleiðir began scheduled international operations in 1947 from a small shed on the east apron of Reykjavík Airport.

[24][25][26] Loftleiðir, anticipating increased demand, began construction of a large passenger terminal at Reykjavík Airport.

[34] The airline was not known for speed or punctuality, but flying with the company became a sort of rite of passage for young "hippies" from America travelling to Europe, one of whom was future U.S. president Bill Clinton.

[38] The staff of Loftleiðir complained that Flugfélag Íslands, although smaller, had gained the upper hand in the united company.

In the same year, it was begun to dismantle the Luxembourg hub in favour of today's decentralized European network, linking the largest cities non-stop to Reykjavík,[42] closing it down altogether by 1999.

On 20 November 1999, a new aircraft livery was introduced, as part of an image campaign designed to retire Icelandair's "backpacker" label in favour of an emphasis on business travel.

As Icelandair particularly focuses on flights to North America, the company was significantly affected by the airspace closure following the September 11 attacks in the same year.

[46] Air traffic restrictions following the 2010 eruptions of Eyjafjallajökull resulted in large parts of the European airspace being closed down.

The eventual closure of Keflavík due to the volcanic ash cloud coincided with an improvement of the situation towards Europe, which allowed Icelandair to move its headquarters with 200 staff to Glasgow and operate flights from there for ten days,[48][49] with shuttle flights to Iceland's Akureyri Airport and round-the-clock bus shuttles onwards to Reykjavík.

[60] Also in 2012, Icelandair resumed domestic services, with regular flights linking Akureyri to its Keflavík hub through subsidiary company Air Iceland.

[62] On 9 December 2014, Icelandair revealed a northern lights-themed Boeing 757-200 (registration TF-FIU) named Hekla Aurora.

The exterior, which was hand-painted by a team of highly skilled airbrush artists from the UK, features artwork depicting an Icelandic winter scene complete with the Aurora Borealis.

An installation of LED mood lighting in the cabin continues the theme by emulating both the colours and dancing patterns of the aurora.

[67] On 17 August 2015 Icelandair announced the augmentation of its global flight network with a new service between Keflavik and Aberdeen, the company's second Scottish destination.

The new service, operated by Air Iceland Connect (a subsidiary of Icelandair Group), commenced in March of the following year, with flights scheduled four times per week.

Since the 1960s, Icelandair has offered passengers travelling on transatlantic flights between North America and Europe an opportunity to stopover in Iceland for up to seven days, at no additional cost.

To raise awareness about its stopover offer, the company launched a new social media initiative in 2014, with the hashtag #MyStopover.

[80][81] On 5 November 2018, Icelandair announced plans to take over its low-cost competitor, WOW Air, with the two airlines to be operated as separate brands.

[91] All of Icelandair's aircraft are equipped with a free-of-charge VOD in-flight entertainment system that includes seatback, and touch-screen monitors for each passenger.

[103] In 2005, the airline, on behalf of its parent company Icelandair Group, announced an order for ten Boeing 737-800 aircraft with options for five more.

The airline uses available space in the baggage compartments of Icelandair's passenger aircraft, as well as operating two Boeing 757 freighters to destinations in Europe and North America from its base at Keflavík International Airport.