Icelandair, which celebrates its 80th anniversary this year, is to make Berlin Tegel its newest destination on 3-Nov-2017. The 18-Aug-20017 announcement coincided with news of the insolvency of airberlin, whose main hub is Berlin Tegel and whose only strong growth area has been the North Atlantic.
Icelandair has a well established strategy of connecting passengers between Europe and North America via its Reykjavik hub. It has enjoyed double digit traffic growth for a number of years, stimulated by a strong increase in tourism to Iceland, but driven mainly by its own strategy of expanding trans-Atlantic transfer traffic. This traffic growth has given Icelandair Group a good track record of profitability since the global financial crisis, but its results dipped in 2016 and again in 1H2017.
Intense competition, due to the growth of the Icelandic LCC WOW air (which also offers trans-Atlantic connections) and also from LCCs such as Norwegian (operating nonstop trans-Atlantic flights), has put unit revenue under pressure just as Icelandair is suffering a rise in unit cost.
Nevertheless, Icelandair is implementing a profit improvement plan and still expects plenty of room for growth, as illustrated by its move into Berlin.
To access CAPA Premium Analysis you need a CAPA Membership
Your window into the latest insights
CAPA employs an industry-leading Analyst team based in Europe, North America, Asia and Australia who offer unique perspectives and independent and accurate commentary of critical industry developments globally. CAPA Members rely on our Analysis to unlock valuable insights and actionable intelligence to keep ahead of the game.
Big picture strategic view
Our Analysts don’t just report the news - they take a big picture strategic view of aviation dynamics, issues and trends and analyse the implications of these developments for you.
The CAPA Analyst team is based globally to ensure our CAPA Members have access to independent, unique perspectives covering an entire spectrum of daily, worldwide commercial aviation developments.
Customise your Alerts
CAPA Members can use CAPA Alerts to receive daily, weekly or monthly and customised updates on our Analysis.
I'm very impressed by the factual and detailed analysis CAPA is always doing.- CEO, Airline Member
Phone: +61 2 9241 3200 | Email: email@example.com