The saga of Loftleidir Icelandic began in 1944 when three young Icelandic pilots returned from their flight training in Canada and founded Loftleidir. The exact date of foundation is March 10th 1944. To begin with Loftleidir served only the domestic market but already on the Icelandic national holiday June 17th 1947 the company started its first international route between Reykjavik and Copenhagen. The aircraft used on the route was a Douglas DC-4 Skymaster, the first real international airplane in Iceland.
In 1948 US president Harry S. Truman signed the Civil Aeronautics Board document permitting Loftleidir Icelandic to fly to the United States. On August 26th 1948 Loftleidirs Skymaster landed at Idlewild Aiport (now known as JFK) with 46 passengers in the first commercial flight between Iceland and the US. In 1952 Loftleidir began their scheduled service between New York and Europe via Iceland. A schedule that is still operated by Icelandair over 50 years later. Later that same month Loftleidir Icelandic opened an office in Copenhagen and in July another Skymaster plane was added to the fleet, carrying the name Geyser. In august Geyser landed in Idlewild airport in the first scheduled flight to New York. The crew in this historical flight was greeted by Hjalmar Finnson, president of Loftleidir. Hjalmar supervised Loftleidir's application to the FAA and his experience in the American business environment was crucial for the success of the company.
During the '60s and the '70s Loftleidir pioneered as a low fare service airline across the North-Atlantic flying into Luxembourg "the heart of Europe." The airline became very popular among college students travelling abroad and soon became know as "The Hippie Airline" flying among others former US president Bill Clinton. When the company acquired bigger and faster planes and IATA began working against the companies low cost price strategy, Luxembourg became the company's lifeline in crossing the Atlantic and in fact lay the ground for it's success. During the next few years Loftleidir became some sort of an enterprise, employing hundreds of people and opening up sales offices in the States and in Europe.
When the world economy worsened and the competition with Flugfelag Islands became more fierce the Icelandic government continually tried to convince the two carriers to merge. Finally in 1973 Loftleidir and Flugfelag Islands were merged into Icelandair. The name Flugfelag Islands was brought to life again in 1997 when the domestic arm of Icelandair and Flugfelag Nordurlands were merged.
So since 2003 Loftleidir Icelandic is again covering the skies as Icelandair wet lease and charter arm.