Icelandair is the main airline of Iceland, headquartered at Reykjavík Airport in Reykjavík. It is part of the Icelandair Group and, during the summer of 2015, operated scheduled services to 39 cities in 16 countries on both sides of the Atlantic Ocean out of its hub at Keflavík International Airport. The geographical position of Iceland allows one-stop transatlantic flights, which are one pillar of the airline's business strategy, along with traffic to and from the country.

Icelandair traces its roots back to 1937, when Flugfélag Akureyrar was founded in Akureyri on the north coast of Iceland. Flight operations started in 1938 with a single floatplane of the type Waco YKS-7. In 1939 the airline was grounded when this aircraft was destroyed in a capsizing accident. The company moved to Reykjavík, where it acquired another Waco aircraft and was re-launched in 1940 as Flugfélag Íslands, which translates as Flight Company of Iceland. Previously, two unrelated airlines of the same name had existed in the country (from 1919 to 1920, and between 1928 and 1931). For international purposes, the name Iceland Airways was adopted.

The fleet was expanded with a Beechcraft Model 18 in 1942; and with two de Havilland Dragon Rapides and a Consolidated PBY Catalina in 1944, the latter being the first ever aircraft registered in Iceland to be flown to Iceland by an Icelandic crew from North America. On 11 July 1945, this aircraft operated the first commercial flight over the Atlantic Ocean for the airline, which led from Reykjavík to Largs in Scotland, with four passengers and four crew members on board. Regular flights to Prestwick Airport in Scotland and Copenhagen in Denmark, using Consolidated B-24 Liberator aircraft leased from Scottish Airlines were launched in 1946.

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