Air subsidy change could swing family costs by about 20,000 kroner
Wednesday 28th October 2026 on 10:31 in
Iceland
A family of two parents and a child could save just over 20,000 kroner on flights under proposed changes to Iceland’s Air Bridge subsidy, or pay nearly 20,000 kroner more, depending on ticket prices and when and where they travel, according to a comparison by mbl.is.
The comparison used Icelandair Economy Standard fares on October 26 for return trips between Reykjavík and Ísafjörður, Akureyri, Egilsstaðir and Höfn. The current subsidy covers 40% of the fare. The proposed change would instead provide a fixed amount for each flight leg: initially 7,000 kroner, with Infrastructure Minister Eyjólfur Ármannsson saying after criticism that he planned to review the amount and raise it to 9,000 kroner.
Under the revised proposal, the subsidy would total 54,000 kroner for the family’s six flight legs. Residents outside the capital area would continue to be eligible for six subsidised flight legs a year.
In the Akureyri example, the family’s fares total 84,560 kroner before the subsidy. They would pay 50,736 kroner under the current system, compared with 30,560 kroner with the fixed subsidy, a saving of 20,176 kroner.
In the most expensive Egilsstaðir example, the total fare is 184,560 kroner. The family would pay 110,736 kroner with the current discount and 130,560 kroner under the fixed subsidy, an increase of 19,824 kroner.
The two systems produce the same result when the family’s total fare is 135,000 kroner. Below that amount, the fixed subsidy is more favourable; above it, the 40% discount gives a greater saving.
The proposed change has drawn criticism, particularly outside the capital area. The Association of Municipalities in East Iceland has said a fixed subsidy would weaken living conditions for people in rural areas because those paying the highest fares would receive the smallest discount in proportion to their costs. It has called for a higher percentage-based discount.
The trustees of the Westfjords Labour Union have also called for the current system to remain unchanged. The union’s chairman, Finnbogi Sveinbjörnsson, said raising the planned payment from 7,000 to 9,000 kroner would not substantially change the union’s position.