Demand for Icelandic tourism this summer may be cooling off.
United Airlines just cut its Newark to Reykjavik service, first seen on Cirium’s schedule and later confirmed by a spokesperson for the airline.
The airline had planned to restart seasonal summer service on the 2,601-mile route on May 12 and operate daily flights through October 27. United began serving this market on a monthly basis. season in May 2018.
Now, just over three months before the roadmap is supposed to restart, United are pulling out of the plan altogether. “We regularly adjust our schedules for a variety of reasons including the needs and broader needs of our network,” the spokesperson explained.
aBlue Lagoon, Iceland. JEFF SHELDON/UNSPLASHWithout the Newark connection, United passengers would have to fly to Iceland via the airline’s hub at Chicago O’Hare International Airport (ORD). The airline will maintain daily service between ORD and Keflavik Airport (KEF) from May 12 to September 27.
It is not clear at this time if United have any plans to deploy Boeing 757-200 169 seat aircraft elsewhere as it will not operate the Newark to Iceland route. This single-aisle aircraft is capable of performing missions over water. United even plans to send it to Malaga, Spain – one of the coolest thing about it new route map pin included in the airline upcoming transatlantic expansion.
Instead, the airline could simply rotate the aircraft through its existing domestic and international network, rather than adding a new route near the beginning of summer.
Airlines often want to announce their long-haul routes with enough lead time to stimulate demand and market new services to key audiences.
That said, United’s move could baffle some industry observers, especially since Iceland is a Favorite destination of American tourists in the past summers. the country has one of the first to reopen from pandemic closures, and it has seen a flurry of new and expanded airline services to meet growing demand.
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Apparently, United didn’t find the booking and yield metrics strong enough to hold the Newark to Iceland route.
Icelandair, the national carrier, will become the only airline serving the route when United withdraws from the market.
Meanwhile, competition from nearby John F. Kennedy International Airport (JFK) in Queens is slightly stronger, with Icelandair and Delta Air Lines going head-to-head on the New York to Reykjavik route.
While Iceland is a popular tourist market, airlines have historically failed to generate impressive throughput on these roughly five-hour flights. With ultra-low-cost carriers flooding the market — along with Icelandair’s frequent ticket sales — U.S. airlines are forced to compete more closely on price. This has resulted in lower overall ticket prices.
It’s quite common to see round-trip airfares costing around $400 to $500 on Icelandair — and many of these itineraries even include a free stop in Iceland with a connection to Europe. US airlines cannot offer any connections outside of Iceland, so they are competing for O&D (destination and origin) traffic.
In addition, Icelandair and other discount carriers, such as Play, have grown recently; they added the service Detroit; Dulles, Virginia; and Hamilton, Ontario, to name a few. It appears that United now considers the North American market to Iceland to be oversaturated and that its Newark flight is no longer economically viable.
Among US airlines, Delta will take the lead in Icelandic service this summer, offering nonstop flights from Detroit, Minneapolis and New York.
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