By 1984, Icelandair was in no financial position to renew its fleet. Most of its purchases had been made at discount prices, including three DC-8-63 jets purchased on good terms and then sold four years later for twice the original purchase price . New aircraft were simply not on the shopping list, even though some of the airline's planes were 20 years old.
The carrier needed to find new ways to satisfy passengers' differing spending power and their demands for comfort. They decided to divide the cabin space to offer more comfortable facilities and service for a higher ticket price. This innovation, introduced on April 1, 1984, was dubbed Saga Class. At first, passengers in the new class had to sit in similar seats to those in economy class until 1988, when wider seats were installed for those paying the higher fares.