Price war

Price war

1955

As Loftleidir Icelandic's operations began to blossom, the company decided not to join IATA, the International Air Transport Association . This was an interesting decision, as the association helped other airlines economize in some areas, and also established airfares on many routes.

The small nation of The Grand Duchy of Luxembourg was not bound by IATA decisions, which turned out to be very convenient for Loftleidir. No airlines flew scheduled flights to Luxembourg, and their government there was very interested in a joint venture. The result was the introduction of passenger flights in 1955. Loftleidir Icelandic could offer low prices between Europe and America, and ticket sales increased rapidly. During its busiest years, the company flew 300,000 passengers to Luxembourg. From there, they traveled by rail or coach to towns and cities all across Europe.

But there was more behind this success. Loftleidir Icelandic's marketing staff were innovative, and introduced pioneering sales techniques. Among many new ideas, passengers could pay for their tickets over an extended period of up to two years. Doing business in this manner was unheard of at the time. They also offered guided tours and special packages for passengers stopping over in Iceland on their way across the Atlantic. This became the origin of the Icelandair Stopover.