Upon returning from flying lessons in Canada, Icelandic pilot Alfred Eliasson and a few of his fellow training partners decided to start a private airline to compete with the current national carrier, Flugfélag Íslands. Eliasson’s airline, named Loftleiđir, started service between Reykjavik and ĺsafjöđur using a Douglas DC-3 on April 6, 1944. The carrier slowly expanded domestically adding cities such as Akureyri and Egilsstađir to their route map. The airline saw success in their early years as they held their own in a competition with the national carrier. Loftleiđir operated a wide variety of aircraft, acquiring whatever was cheap and available to fly between Icelandic cities.
As the carrier expanded, the ability to go international became a key stress point for Loftleiđir as they slowly fell behind Flugfélag ĺslands. However, the airline finally received permission to fly international, and on June 17, 1947, which just happened to be the Icelandic National Day, Loftleiđir finally took off on their first international route between Reykjavik and Copenhagen, Denmark. The carrier added routes quickly to the European markets, with their primary services being between Reykjavik and Copenhagen, Luxembourg, and London. The airline received new Douglas DC-4s to help with the route, which also allowed for them to launch service between Reykjavik and North America. The first route between the States and Iceland on Loftleiđir was to New York’s Idlewild Airport.
While the carrier joined the international scene, their also expanded into the leasing market. Loftleiđir became known for being willing to lease planes to other companies in order to make a little extra money, since the international routes put a stress on Loftleiđir’s bank account. The first major lease was giving most of the carrier’s Douglas DC-4 fleet a two-year lease between 1949 and 1950 to American carrier Seaboard & Western Airlines. The carrier also offered leases for airlines flying between Europe and Africa and on Hajj flights to Mecca.
Struggling to keep both the rapidly expanding Flufélag ĺslands and Loftleiđir airlines at bay as both carrier started to struggle monetarily, the Icelandic government made a proposal to merge the two carriers into one in 1952.The government hoped that merging the two carriers would decrease the gaps in domesetic coverage since both carriers could not fully utilize Iceland’s domestic routes due to competition. Loftleiđir met this proposal with a very fierce “no”, stating that the terms of the airlines’ merger greatly favored those of the government backed Flugfélag ĺslands carrier. Loftleiđir removed all domestic service from their route map later that year, focusing instead of using Iceland as a stop over point for those traveling between Europe and North America.
As part of the removal from Iceland, Loftleiđir started up bases in New York and Luxembourg, focusing on making Luxembourg the main launching point for transatlantic flights. With new bases came new jets, as the Douglas DC-4s were removed from service in favor of the more superior Douglas DC-6s. The Canadair CL-44s were also added to the airline’s fleet later on.
The 1960s led to change for Loftleiđir, as the company slowly started to add new flights between Iceland and Scandinavia and continued to show how Iceland is the perfect stop over point for transatlantic flights. However, long haul flying with no domestic arm or partners continued to hurt Loftleiđir from gaining traction and producing a large profit. The carrier did manage to finance the purchase of the Bahamian carrier Air Bahamas as a way to get landing slots in Nassau for their charter aircraft. The airline also used their presence in Luxembourg to expand to the cargo industry, becoming a heavy investor in the startup cargo carrier CargoLux. The airline also played a vital role in financing the start of commercial airline Luxair.
As the 1960s came to a close, Loftleiđir’s financial situation grew dimmer by the month. At first sight it seemed like he airline was doing well as it started flying Douglas DC-8s on their stop over routes, including Luxembourg-Reykjavik-New York. However, the carrier suffered due to the lack of a need for a stop over in Iceland, and with the new jet aircraft, stopping in Iceland became unnecessary for most transatlantic customers. Loftleiđir once again turned to the leasing market to keep themselves out of bankruptcy.
With finances dwindling and rival Flugfélag ĺslands applying pressure, Loftleiđir was on the verge of failure. The carrier could not receive aid due to the 1970s energy crisis that saw fuel prices soar. In 1973, the Icelandic government reapproached Loftleiđir with an offer to merge the two carriers into one. With no sign of a profit returning, the carrier agreed started the merge process. The merger process took six years and in 1979, Flugfélag ĺslands and Loftleiđir merged into what is now known as Icelandair, with domestic routes still being flown by Flugfélag ĺslands.
The name Loftleiđir reemerged in 2004 when Icelandair created “Loftleiđir Icelandic” as a charter arm of the carrier. The charter company operated Boeing 767s and Boeing 757s as charter missing for any airline needing the extra planes. However, the Icelandic economic crisis of 2008 officially ended Loftleiđir Icelandic as the carrier was rolled back into Icelandair. Loftleiđir Icelandic has returned to the skies over the last two years, and earlier this year became the first airline to land a Boeing 757 on ice in Antarctica. Despite Icelandair resurrecting the name “Loftleiđir,” the airline has no plans for commercial flights operated in the carrier’s name.
Hints of Loftleiđir still can be seen across Europe, especially Luxemboug. The Luxembourg cargo carrier CargoLux now operates a fleet of 22 Boeing 747s, and is one of the largest cargo airlines in Europe. Luxair still operates routes around Europe using Boeing 737s and regional jets. A few of the Loftleiđir Douglas DC-8s flew for UPS before being retired to Roswell, New Mexico in the late 2000s. Icelandair has also embraced much of the former carrier, originally naming their airline’s hotel chain the “Loftleiđir Hotel” prior to changing the name to Icelandair Hotel. The airline most recently revived the Loftleiđir idea of making Iceland a transatlantic stopover. Icelandair started the marketing in 2014 with the #MyStopover hashtag as well as painting a Boeing 757 in Aurora Borealis colors with the hashtag on the winglets. Although only around for 30 years, Loftleiđir played a major role in shaping the airline industry in Luxembourg and Iceland and the way in which transatlantic flights are flown.