United cut Iceland road just 3 months before restart

Demand for travel to Iceland this summer could cool down.

United Airlines has just cut its Newark-Reykjavik route, as first seen in Cirium’s schedules and later confirmed by a spokesperson for the carrier.

The airline had planned to restart summer seasonal service on the 2,601-mile route on May 12 and operate daily flights until October 27. United began serving this market on a seasonal basis in May 2018.

Now, just over three months before the route is supposed to restart, United are unplugging it completely. “We regularly adjust our schedule for a variety of reasons, including demand and the broader needs of our network,” a spokesperson explained.

The Blue Lagoon in Iceland. JEFF SHELDON/UNSPLASH

Without the Newark connection, United travelers will need to fly to Iceland through the airline’s hub at Chicago’s O’Hare International Airport (ORD). The carrier will maintain daily service between ORD and Keflavik Airport (KEF) from May 12 to September 27.

It was not immediately clear whether United planned to deploy the 169-seat Boeing 757-200 elsewhere, as it will not operate the Newark-Iceland route. This single-aisle aircraft is capable of performing missions over water. United even plans to send it to Malaga, Spain – one of its most exciting new road pins included in the airline’s next big transatlantic expansion.

Instead, the airline can simply run the plane through its existing domestic and international network, instead of adding a new route so close to the start of summer.

Airlines generally like to announce their long-haul routes with enough time to stimulate demand and market the new service to key audiences.

That said, United’s decision could be a headache for some industry watchers, especially since Iceland has been a popular destination for American tourists in previous summers. The country was one of the first to reopen after pandemic shutdowns, and it has seen a wave of new and expanded air services in response to increased demand.

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Apparently United don’t see strong enough booking and performance metrics to maintain the Newark-Iceland route.

Icelandair, the national carrier, will become the only airline to serve the aforementioned route now that United is pulling out of the market.

Meanwhile, competition from nearby John F. Kennedy International Airport (JFK) in Queens, New York, is slightly stronger, with Icelandair and Delta Air Lines competing on the New York-Reykjavik route.

While Iceland is a popular tourist market, airlines have never been able to generate impressive returns on these roughly five-hour flights. With ultra-low-cost carriers flooding the market – as well as Icelandair’s frequent fare sales – US airlines have been forced to compete more closely on price. This resulted in lower overall rates.

It’s quite common to see round-trip airfare around $400-$500 on Icelandair – and many of these itineraries even include a free stopover in Iceland with a connection to Europe. US airlines cannot offer any connectivity beyond Iceland, so they compete for O&D (origin and destination) traffic.

Additionally, Icelandair and other low-cost carriers, such as Play, have expanded recently; they added service to Detroit; Dulles, Virginia; and Hamilton, Ontario, to name a few. It appears United now believe the market from North America to Iceland is oversaturated and their flight to Newark is no longer economically viable.

Among US airlines, Delta will lead service to Iceland this summer, offering nonstop flights from Detroit, Minneapolis and New York.

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