A New Airport for Iceland?

By David Hopwood | January 9, 2020

A New Airport for Iceland?, by Travel Radar Correspondent David Hopwood

During the global recession, Iceland was particularly hard hit. The currency (the króna) crashed, unemployment rocketed, and the stock market was decimated. The country’s economy was originally founded on fishing, then heavy industry, but the economic recovery from the 2008 recession relied heavily on tourism; in 2015, 31% of the country’s foreign exchange was generated by tourism and it contributes 10% to the GDP.

Crucial to the tourism business was naturally the aviation industry, led by the national airline Icelandair. With cheap fares, a geographical position reasonably close to mainland Europe & North America and very astute marketing the tourism business boomed. Today the population of 350 000 receives about two million tourists a year. Not surprisingly this has led to many of the issues plaguing other tourism-led economies around the world; including the impact on a delicate ecology, inadequate hotel infrastructure, local resentment and others.

Keflavik Airport  ©  superjetinternational

Affecting Icelandic tourism in particular is the centralisation of tourism on the south-west of the country, particularly around the capital Reykjavik, leaving the other parts of the country (it’s about the size of Portugal) including the beautiful and uncrowded Akureyri, the famous Skaftafell National Park, the Western fjords and many other destinations struggling.

Akureyri   ©

It’s not surprising; while the only international airport is at Keflavik, it doesn’t cater for domestic flights; these are handled by the smaller city-centre Reykjavik Domestic Airport and a transfer takes at least two hours; Icelandair operates its domestic carrier Air Iceland Connect from there.

Skaftafell National Park    ©

So? Build a new airport!

In December last year, the Icelandair group issued a report saying that it wasn’t feasible to move domestic operations to Keflavik; the airport handles 19 million passengers annually and is at capacity, but demand can be expected to grow to 30-35 million. They propose an entirely new airport serving both international and domestic passengers at Hvassahraun, on the coast south of Keflavik. The estimated costs are $2.4 billion and would take ten years to build.

The city of Reykjavik and the Icelandic government have together contributed $1.5 million to a project to study weather and flight conditions at the proposed new site over the next two years.

Travel Radar can help them begin; current weather in the area; light snow showers, -4c, (feels like -13c) and 50 kph winds.


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