ICELANDAIR INCREASES FLIGHTS AND ANNOUNCES NEW DESTINATIONS FOR 2007

Columbia, MD, October 16, 2006 - Icelandair will begin service to Bergen, Norway, with 3 flights a week and to Gothenburg, Sweden, with 2 flights a week and offer 4 flights a week from Halifax, Canada, starting spring 2007. Icelandair will also increase the number of flights to Paris, Frankfurt, Amsterdam and Helsinki and include new afternoon flights from Boston and New York-JFK.

"We are celebrating our 70th anniversary next year and part of that celebration is to offer our customers the largest flight schedule in the history of Icelandair,” said Jon Karl Olafsson, Icelandair’s CEO. “By offering this new service we are laying the ground work for an increase in the number of visitors to Iceland and beyond,” he concluded.

Icelandair currently offers evening flights from its US gateways in Baltimore/Washington, Boston, Minneapolis/St. Paul, New York-JFK and Orlando Sanford. Service from San Francisco will be discontinued. Reykjavik serves as the airline’s hub in Iceland, with easy year-round connections to Amsterdam, Copenhagen, Frankfurt, Glasgow, London, Manchester, Oslo, Paris and Stockholm, and seasonal flights to Barcelona, Berlin, Helsinki, Madrid, Milan, Munich and Zurich.

Icelandair will now offer 150 flights per week from Iceland. This will increase the current 2006 schedule by 17 percent.

Icelandair reservations and information are available at (800) 223-5500 and online at www.icelandair.com.

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