Investment in flights to new airports
The Icelandic government has decided to invest in new international flight routes to regional airports in Iceland.
Keflavík International Airport (KEF) is currently Iceland’s only airport handling regular international flights.
A working group set up in May this year has recommended direct investment in new regular international flights from other airports in the form of a Market Development Fund and a Route Development Fund.
The group looked into the possibility of international flights to and from Akureyri (AEY) in North Iceland and Egilsstaðir (EGS) in East Iceland.
The Funds are intended to serve as an incentive for Icelandic and foreign operators and private investment will be topped up with money from the Icelandic State. Payments will be made from the Funds once a given flight has been operating for a specific minimum period.
The State will recuperate its initial investment in the form of taxes. Tax revenue from two flights a week for a year is estimated at ISK 300-400 million (approx. €2.1-2.8 million). Once the Funds are dissolved after three years, this revenue will continue to flow into the Icelandic exchequer.
The task of setting up the Funds has been given to Icelandic Minister for Industry and Trade Ragnheiður Elín Árnadóttir.