Cover photo: Jóhannes Kristjánsson
The Icelandic Road and Coastal Administration (IRCA) (Icelandic “Vegagerðin”) made a final decision about state subsidies for domestic flights for the next three years. The subsidies for scheduled flights will be shared between two airlines – Eagle Air (Flugfélagið Ernir) and Norlandair. Eagle Air will take the route from Reykjavík city airport (ICAO: BIRK) to Höfn (ICAO: BIHN) on the south-east of Iceland, while Norlandair has got two routes from Reykjavík to airports in Western Fjords: Bíldudalur (ICAO: BIBD) and Gjögur (ICAO: BIGJ). The subsidies will cover flights from 16 November 2020.
Previous years scheduled flights to Bíldudalur and Gjögur were performed by Eagle Air, but the airlines did not get the same amount of state aid this year. At first, Eagle Air was risking not to get subsidies from the state at all, when together with Norlandair lost the contract in favour of Flugfélagið Austurlands, who offered the lowest price.
Norlandair’s offer for a flight to Hofn in Hornafjörður amounted to ISK 677 million (4,8 million USD, 4,1 million euro, converted by Islandsbanki), while Eagle Air offered ISK 531 million (3,8 million USD, 3,2 million euro, converted by Islandsbanki) and Flugfélag Austurlands – ISK 370 million (2,6 million USD, 2,2 million euro, converted by Islandsbanki). Vegagerðin’s cost estimates amounted to 500 million ISK (3,6 million USD, 3 million euro, converted by Islandsbanki). For the second package of routes, Vegagerðin’s estimate assumed that the cost of flights to Gjögur and Bíldudalur would be ISK 726 million (5,5 million USD, 4,6 million euro, converted by Islandsbanki). Norlandair’s bid was ISK 612 million (4,4 million USD, 3,7 million euro, converted by Islandsbanki), Eagle Air offered ISK 797 million (5,7 million USD, 4,9 million euro, converted by Islandsbanki) and Flugfélag Austurlands ISK 392 million (2,8 million USD, 2,4 million euro, converted by Islandsbanki).
Considering the fact that Eagle Air has stopped scheduled flights to Vestamannaejar (ICAO: BIVM) archipelago in September 2020, the loss of the subsidised contract would mean for the airline a significant reduce of scheduled flights in Iceland. Eagle Air has appealed the decision of Vegagerðin.
In April 2020, Icelandic government have agreed with the airline Air Iceland Connect on regular flights to Egilsstaðir (ICAO: BIEG) and Ísafjörður (ICAO: BIIS) until 5 May, RÚV reported. Maximum of ISK 13 million (90 thousand USD, 83 thousand euro, converted by Islandsbanki) was paid for the contract.
