Overview

• Operations ceased on September 29 with every flight canceled, and Keflavik Airport said about 1,750 passengers were affected that day.
• The board cited prolonged financial underperformance, poor recent ticket sales and internal disagreement over strategy changes.
• Roughly 400 employees are losing their jobs as the carrier’s 10 Airbus A320neo-family aircraft remain grounded.
• Authorities told customers not to go to airports and to rebook with other airlines, advising rescue fares, credit card chargebacks or package‑tour protections.
• A 2024 restructuring returned the Icelandic AOC and shifted operations to a Maltese subsidiary with back‑office in Malta and Lithuania, while U.S. routes were already being cut and Icelandair plans added seats rather than special fares.