Icelandair is to introduce another pair of Boeing 757s to its fleet in 2013 after opting to add three new destinations to its network.
The airline will operate to the Russian city of St Petersburg, as well as Anchorage in Alaska and Zurich, Switzerland.
Icelandair Group says it will raise flight capacity on international routes by 15% next year, by taking its fleet to 18 757s - two more than in 2012.
It expects to transport 2.3 million passengers, compared with 2 million this year.
"Growth is projected to be more over the winter than in summer which is in line with the company's strategy to decrease seasonality in its operations," says the carrier.
It adds that it will look at reducing the number of tourists to Iceland by shifting its focus to transatlantic travel if there are "adverse" changes in the tax regime next year.