Iceland getting new arctic airline as tourism rebounds

[REYKJAVIK] Iceland will get a new airline in Niceair, which plans to start flights to mainland Europe amid signs that tourism in the region is bouncing back from the pandemic.

The carrier aims to link Akureyri near the Arctic circle with 3 destinations in the UK, Spain and Denmark from June. Backed by investors including Iceland's biggest fishing company Samherji, Niceair will try to attract travellers eager to experience the region's fjords or go on whale-watching trips.

"We hope to revive the old notion of the untouched rural Iceland with its vastness and few people around," managing director Thorvaldur Sigurjonsson said in an interview on Thursday (Feb 17).

Iceland is a busy air-travel market due to its strategic location in the North Atlantic between Europe and North America. More than 20 airlines including Deutsche Lufthansa, SAS and flag carrier Icelandair served the country before the pandemic. Plummeting sales due to Covid have resulted in capacity reductions and financial difficulties for carries, with some accepting state aid to survive.

Niceair's funding is entirely equity-based and sufficient to sustain loss-running operations for at least 2 years, Sigurjonsson said. The carrier will initially use Airbus SE A319 aircraft of a European partner airline it didn't identify. While Niceair will operate its own sales channels, its partner will be responsible for maintenance, quality control and regulatory compliance, he said.

Countries in Europe are beginning to reopen as the latest coronavirus wave wanes, bolstering air travel and bookings with tour operators such as TUI. Within Europe, flying will surpass 75 per cent of pre-pandemic levels next month, according to Cirium data from airline schedules. BLOOMBERG