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Aviation History
1988
1988 - 3621.PDF
Left Ten domestic destinations include all the major population centres on the island. Right Greenland and the Faeroe Islands are also served by Icelandair flights and four DC-8-63s. The airline recently sold three of its DC-8s to Electra Aviation in London, and is temporarily leasing them back. One of the three 727s is leased, and another is on the point of being sold. In parallel with the sale of its 727s and DC-8s, Icelandair has taken probably the most critical decision since its formation in 1973—to invest in a new fleet. It has ordered two Boeing 737-400s (plus two on option) and two Boeing 757-200s (with one on option). The 737s, for European services, will be delivered next spring, with the 757s following in February and March 1990 for service in the north Atlantic routes. A deci sion to convert the first 737 option into a firm order before the end of this year is virtually certain, according to the airline's senior vice- president of operations, Leifur Magnusson. The average age of Icelandair's current fleet (including the domestic fleet of F.27s) is more than 20 years, with an average of 45,000 flight hours per aircraft. One of its recently-sold DC-8-63s had more than 62,000hr to' its credit. Magnusson told Flight: "An analysis of the departure reliability of this, one of the oldest fleets in Europe, showed us that the number of technical problems was increasing and affecting our operating efficiency". Accord ing to Magnusson this fact, allied to rising maintenance costs for the older aircraft, prompted the airline to shop for a new fleet. Two "shopping windows" were consid ered, one for European-route aircraft, and one for transatlantic operations. The first "window" (on a graph of capacity versus aircraft range) included the 737-200, -300, -400, and -500, as well as the MD-83 and'-87 and the Airbus A320-200. The second centred on the Boeing 757, leaving power- plant selection between the Rolls-Royce RB.211-535E4 and the Pratt & Whitney PW2000 as the sole decision. Icelandair chose the former. Magnusson maintains that the decision on an aircraft for Europe came down to which manufacturer could deliver at the time speci fied by Icelandair. He emphasised that the airline was impressed with the Airbus, but FLIGHT INTERNA TIONAL, 17 December 1988 35 said that the main worry was that its advanced technology might require rather too complex maintenance for the airline's limited resources. ..Icelandair's president and chief executive, Sigurdur Helgason, signed the £33 million contract with Rolls-Royce on November 23. The deciding factor, according to Helgason, was the 535's clearance for extended-range operations over water (Erops). Another important factor was the widespread use of the engine by European charter operators. This reduces the investment risk by facili tating easy lease or sale into this market should Icelandair's own transatlantic opera tions hit problems. With the climate of deregulation in the United States, the time has come for Icelandair to "shift its emphasis away from North American operations [except for those to New York as an important business centre] and towards higher-yield markets within Europe," according to vice-president of marketing Petur Eiriksson. In the first eight months of 1988 Icelandair saw a 12 per cent recession in passenger traffic on the North Atlantic. Attaining this higher yield will be achieved by "a gradual increase in the proportion of business-class seats to tourist," Icelandair's Boeing 727 s are infrequent visitors to Reykjavik Airport, the base for the domestic fleet ofFokker Friendships
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