Post-crisis peak at last

Air Atlanta Icelandic Boeing 747-400

Iceland will become the first European country that hit the financial crisis in 2008 to beat its pre-crisis peak of economic output this year. Combined with a reduction of capital controls and tempered by the 39 per cent tax on inventors looking to take their money overseas, it continues to make progress. All of which is good news for its growing and strategically important airfreight business.

The country’s airline Icelandair has been the main catalyst in bridging North America and mainland Europe through Iceland. In May, it announced further expansion of its global network with a new year-round service from Chicago O’Hare International Airport. Flights will begin next March with four weekly round trips to Iceland on Mondays, Wednesdays, Fridays and Sundays, with onward connections to more than 20 destinations in Europe. According to the International Air Transport Association’s (IATA) electronic air waybill (e-AWB) statistics, the company’s airfreight division Icelandair Cargo is leading Europe in e-AWB penetration with 46.1 per cent for March 2015 on e-AWB use from Keflavík; an increase of 12.7 per cent from February. Icelandair Cargo had set a target of 40 per cent for the end of 2015.

Icelandair Cargo managing director, Gunnar Már Sigurfinnsson, tells Air Cargo Week (ACW) that both export and import figures shaped up well for the first part of 2015. “In May, we were threatened with one of the biggest strikes in the history of Iceland and as a result we saw a slowdown in imports, but despite this the figures have been acceptable. European markets remain on a par or slightly up on the previous year, but the most growth in our network is between Iceland and North America where we are seeing good export numbers from Iceland,” he says.
The addition by Icelandair Cargo of a freighter flight to Boston in late 2014, early 2015, proved successful and it plans to reinstate the service for the late 2015, early 2016 period. “We are using passenger aircraft to all the destinations we have and this is reducing the need for extra freighter flights, though we do have one more flight to [John F Kennedy International Airport in the next few months],” Sigurfinnsson says.

From March 2016, Icelandair will start operating Boeing 767-300, flying them on its key bellyhold routes to Boston, New York, London Heathrow and Amsterdam. “This is a big change for us as we will be able to multiply our belly capacity to those markets at the same time,” says Sigurfinnsson. “We are eagerly anticipating this change as it will not only allow us to offer more capacity, but also improve the quality of our service, offering a containerised service on passenger flights. We will continue to operate our two freighter flights between Iceland to North America and Europe.”

Icelandair Cargo underlined its ambitions for expansion with the opening of a 1,000 square metre cooled area extension to its warehouse facilities in Keflavik Airport in May, and at the same took over the sales and marketing of airfreight services for Air Iceland. Air Iceland, which operates a freight department for domestic flights, has seen an increasing growth in airfreight between Iceland, Greenland and the Faroe Islands and decided the more specialist Icelandair Cargo would better serve its customers on international routes. Air Iceland’s freight division joined Icelandair Cargo staff from 1 May, but remain at Reykjavik. Air Iceland will continue to receive and deliver cargo at its destinations using its own aircraft.
Iceland’s Cargo Express, established in 2008 and representing air cargo sales for several airlines flying in and out of the country, reports overall exports and imports as being, “more or less flat,” compared to last year. Cargo Express managing director, Róbert Tómasson, tells ACW: “Despite this our numbers are up by approximately 20 per cent year on year so we are pleased with our increased market share of the Icelandic market.” Expansion by Icelandic low-cost carrier WOW has added year-round destinations such as Dublin, Amsterdam, Boston and Baltimore to the Cargo Express network.

Air Atlanta Icelandic provides aircraft, crew, maintenance, and insurance services, or ACMI services. Atlanta senior vice president for sales and marketing, Baldvin Hermannsson, tells ACW: “On the freighter side of things, we continue to grow, we just recetly added [aircraft] and probably will add another one or two for the remainder of the year or in the next six to eight months. Most likely leased unless we got the right aircraft, at the right price.” Most of the aircraft will be operating Hong Kong to Europe, connecting Eastern Europe. Atlanta has also been looking for opportunities for Airbus A330 for the passenger market. It has one A330 and it is looking at taking on one or two more within 12 months. It maybe on the top of world, but Iceland’s industry is growing in all the directions of the compass.