Competition in Iceland: Icelandair CEO steps down.

If there's one country that has seen the clear effects of low cost carriers entering the market, it's Iceland. In one of my previous articles, I mentioned WOW Air, a low cost carrier focused on providing the lowest rates to travelers. They were first introduced to the world just six years ago and have quickly disrupted the international low cost carrier scene, but more importantly, they have disrupted the Icelandic carrier market.

Prior to WOW Air, the only major airline to control Iceland's Keflavik Airport was Icelandair. Icelandair had 76% capacity share of the market just 5 years ago, today they have just under 45%. Much of this loss has been due to WOW Air, as in a short six years they have been able to take up 33.2% of the market in Keflavik Airport. Part of the reason that they have been able to do this is that they have made Iceland central to their strategic planning, having all of their flights from North America connect in Iceland.

Over the past five years, Icelandair’s capacity share of the market from Keflavík has also shrunk from 75.9% in 2013 to about 45% this year. With this, they have transformed statistics for the airport, back in 2009, departure seats were at 1.2 million per annum, in 2017 over 5.7 million.

In turn, all of these disruptions have forced Icelandair to rethink everything, from corporate strategy, to the restructuring of flight paths, and more. The barring question is if it's already too late for the veteran carrier?

Happy Flying!