Icelandic startup Niceair aims to capitalize on both European tourists’ increasing appetite for visiting Iceland’s north and local industries’ desire for better external air links, the airline’s CEO told Aviation Week Network.

The new airline, based at Akureyri (AEY), plans to start services on June 2, initially using a wet-leased Airbus A319 from Portuguese ACMI specialist Hi Fly. The aircraft will operate in a single-class 150-seat configuration.

“We are a virtual airline, to begin with,” Niceair CEO Thorvaldur Ludvik Sigurjonsson said in an interview. “Virtual airlines are common in the Nordic countries, where one company handles administration and ticketing, while employing a second organization to carry out the actual flying.”

Initial Niceair destinations will be in the UK, Denmark and Spain. Sigurjonsson said he is not yet in a position to reveal specific routes and airports.

The CEO said wet-leasing an aircraft from Hi Fly to launch operations gives Niceair room to learn. “It’s obviously much better to start up with an ACMI contract while you’re testing the ground,” Sigurjonsson said. “If this goes as well as we hope it will, within our group we have a number of AOCs, so that’s not really an issue. Local airline Norlandair is one of our shareholders.”

Sigurjonsson is also CEO of Iceland’s Circle Air, which operates light aircraft for sightseeing and charter work.

At present, there are few international flights into AEY. Dutch LCC Transavia operates 2X-weekly service from Amsterdam (AMS) during the winter season, dropping to 1X-weekly in summer. Prior to COVID-19, there was an upsurge in UK leisure travelers flying to AEY.

Niceair is trying to tap into the growing market for tourists returning to Iceland for a second or more times. First-time visitors tend to fly into Reykjavík's Keflavík Airport (KEF) and spend their time in or around the Icelandic capital.

“But when they return, they want to go directly to rural Iceland. There is a 6-hr. drive from [KEF] to Akureyri,” Sigurjonsson noted.

In addition to incoming tourists, there is significant potential for serving outbound traffic from North Iceland, which has a catchment area of around 50,000 people, he said.

“We estimate there’s a fairly substantial market outbound,” Sigurjonsson said. “Icelanders travel quite a lot; data suggest they fly up to three times a year.”

Several major Icelandic organizations and companies have become shareholders in Niceair. “Large industrial companies want to see this happen,” the CEO said. “They have a lot of exports from the region.”