What is next for KEF?

SCQ83 · Wed Jul 19, 2017 8:38 am

In this thread it is not only mentioned that BA is starting LCY-KEF

viewtopic.php?f=3&t=1368637

But that BA is going double daily to KEF from LHR (flights are on sale already).

BA resumed LHR only 2 years ago with only 3 weekly flights http://icelandreview.com/news/2015/05/0 ... rn-iceland and this winter it will be 16 weekly (14 LHR + 2 LCY). Despite all the competition to London from easyJet, Icelandair, Norwegian, Thomson and WOW Air. So this is crazy growth.

Lufthansa is also becoming year-round this winter from Frankfurt.

It seems at this stage KEF is being considered a major airport that every legacy needs to have in its portfolio.

So I was wondering what could be next for KEF.

Air France? KLM? American? United? Swiss? Turkish? Aeroflot?

21pilots · Wed Jul 19, 2017 9:49 am

Can't see KLM flying there. Too little connecting passengers to/from KEF and lot of competition from local airliners.

SCQ83 · Wed Jul 19, 2017 10:06 am

21pilots wrote:
Can't see KLM flying there. Too little connecting passengers to/from KEF and lot of competition from local airliners.

The point is that London has a crazy competition yet BA is now flying twice daily for those connecting and local traffic.

Delta is now year round to JFK despite Icelandair and WOW Air.

Those "little connecting passengers" are not that few for British Airways or Delta Airlines despite the Icelandic carriers competition in London and New York.

VolvoBus · Wed Jul 19, 2017 4:39 pm

LCY-KEF ? Financing the fish must be bigger business than I thought (sorry, had to get that in).

On an equally (un)serious note, using the Wikipedia population of Iceland of 332,529, how long would it take to evacuate the island using only scheduled flights ?

SCQ83 · Wed Jul 19, 2017 6:00 pm

VolvoBus wrote:
LCY-KEF ? Financing the fish must be bigger business than I thought (sorry, had to get that in).

This winter season KEF will have with London:

London City (BA): 2xw
London Gatwick (BY): 2xw
London Gatwick (DY): 3xw
London Gatwick (FI): 8xw
London Gatwick (U2): 9xw
London Gatwick (WW): 14xw
London Heathrow (BA): 14xw
London Heathrow (FI): 14xw
London Luton (U2): 14xw
London Stansted (U2): 3xw

83 flights per week from Keflavik to London. With a rough average of only 180 passengers, that is about 14,000 passengers per week each way to London alone, or about 5% of the total population of Iceland. Completely crazy.

AaronPGH · Wed Jul 19, 2017 6:28 pm

One of the hottest tourist destinations out there at the moment, and not everyone wants to fly an ULCC

MalevTU134 · Wed Jul 19, 2017 6:30 pm

The one-million dollar question, though: is it a bubble?

SCQ83 · Wed Jul 19, 2017 6:50 pm

MalevTU134 wrote:
The one-million dollar question, though: is it a bubble?

Passenger traffic in May "only" grew by 22.3%, compared to +70.0% :O in January or +61.7% in April.

In any case January-May had 2.842.341 passengers, which is more than the full 2012 (2.764.026).

https://www.kefairport.is/English/About ... tics/2017/

pprrff · Wed Jul 19, 2017 7:15 pm

VolvoBus wrote:
On an equally (un)serious note, using the Wikipedia population of Iceland of 332,529, how long would it take to evacuate the island using only scheduled flights ?

Just the population would be just under 18 days based on 2016 passenger numbers so likely much less if you fill all the planes + new growth.

GolfBravoRomeo · Wed Jul 19, 2017 7:25 pm

Have they started a terminal expansion or new building? It was crowded enough 5 years ago and totally bursting at the seams last time I was there about 18 months ago.

MalevTU134 · Wed Jul 19, 2017 7:29 pm

SCQ83 wrote:
MalevTU134 wrote:
The one-million dollar question, though: is it a bubble?

Passenger traffic in May "only" grew by 22.3%, compared to +70.0% :O in January or +61.7% in April.

In any case January-May had 2.842.341 passengers, which is more than the full 2012 (2.764.026).

https://www.kefairport.is/English/About ... tics/2017/

Sure, but how much of that is transit traffic and how much is O&D traffic? I assume that virtually all transit traffic is on FI and WOW, the rest is virtually 100% to and from Iceland. If those numbers are also valid for O&D traffic, then it clearly is a bubble. There is no population growth, GDP growth or anything, neither in Iceland itself, nor in Europe or North America that justifies that traffic growth, other than a hype for travel to Iceland. And hypes, as we all know, come and go.

SCQ83 · Wed Jul 19, 2017 7:43 pm

MalevTU134 wrote:
Sure, but how much of that is transit traffic and how much is O&D traffic? I assume that virtually all transit traffic is on FI and WOW, the rest is virtually 100% to and from Iceland. If those numbers are also valid for O&D traffic, then it clearly is a bubble. There is no population growth, GDP growth or anything, neither in Iceland itself, nor in Europe or North America that justifies that traffic growth, other than a hype for travel to Iceland. And hypes, as we all know, come and go.

Tourism.

I think we are used to sun tourism (Ibiza has 150,000 people and this year the airport will go well beyond 8 million PAX all O&D) but not to cold tourism. Maybe it is time to change that mindset.

Also Iceland has the enormous advantage that is "nearby" from a geographical point of view for tourists from both Europe and North America.

LondonCity · Wed Jul 19, 2017 7:52 pm

One question not asked is where all these vistors arriving by air will stay ?.

Iceland is facing a shortage of hotel accommodation.

http://icelandmag.visir.is/article/grow ... ions-looms

kelvin933 · Wed Jul 19, 2017 8:29 pm

LondonCity wrote:
One question not asked is where all these vistors arriving by air will stay ?.

Iceland is facing a shortage of hotel accommodation.

http://icelandmag.visir.is/article/grow ... ions-looms

This is the winter schedule there are more tourists in Iceland during the summer so accommodation this winter should not be a problem.
Many will be staying in an Airbnb, central Reykjavik is full of them.

slcdeltarumd11 · Wed Jul 19, 2017 10:00 pm

KEF airport is way too small for the ULCC explosion, shortage of hotels, restaurants over capacity. They need to upsize alot of things. Airbnb is holding the demand in the lower seasons, but high season not enough rooms on airbnb, not even close! They need major infrastructure improvements, but i guess its scary since the tourism can dry up or the ULCC can pack up at any time.

JetBuddy · Wed Jul 19, 2017 10:29 pm

The growth in KEF is fascinating and mind boggling. What's the percentage of transfer pax in KEF?

mjoelnir · Wed Jul 19, 2017 11:08 pm

JetBuddy wrote:
The growth in KEF is fascinating and mind boggling. What's the percentage of transfer pax in KEF?

about a third as it is

MalevTU134 · Wed Jul 19, 2017 11:33 pm

mjoelnir wrote:
JetBuddy wrote:
The growth in KEF is fascinating and mind boggling. What's the percentage of transfer pax in KEF?

about a third as it is

As a local (I take it you are Icelandic from your user name), do you see the growth in tourism to Iceland as a hype, a bubble, or has it come to stay at current levels?

hvusslax · Wed Jul 19, 2017 11:47 pm

MalevTU134 wrote:
SCQ83 wrote:
MalevTU134 wrote:
The one-million dollar question, though: is it a bubble?

Passenger traffic in May "only" grew by 22.3%, compared to +70.0% :O in January or +61.7% in April.

In any case January-May had 2.842.341 passengers, which is more than the full 2012 (2.764.026).

https://www.kefairport.is/English/About ... tics/2017/

Sure, but how much of that is transit traffic and how much is O&D traffic? I assume that virtually all transit traffic is on FI and WOW, the rest is virtually 100% to and from Iceland. If those numbers are also valid for O&D traffic, then it clearly is a bubble. There is no population growth, GDP growth or anything, neither in Iceland itself, nor in Europe or North America that justifies that traffic growth, other than a hype for travel to Iceland. And hypes, as we all know, come and go.

Iceland had 5% GDP growth in 2016, by far the highest growth rate in Western Europe.

Samrnpage · Wed Jul 19, 2017 11:54 pm

I too find this little airport fascinating. 83 flights per week from London to KEF. By comparison, how many weekly flights are there to lets say, Rome from London?

hvusslax · Wed Jul 19, 2017 11:55 pm

GolfBravoRomeo wrote:
Have they started a terminal expansion or new building? It was crowded enough 5 years ago and totally bursting at the seams last time I was there about 18 months ago.

There has been a significant expansion of the south building. Bigger border hall with more border control booths and automated border control machines for EU/EEA citizens, more restaurants, shops and waiting areas in the non-Schengen area and a new Saga Lounge for Icelandair.

MalevTU134 · Wed Jul 19, 2017 11:57 pm

hvusslax wrote:
MalevTU134 wrote:
SCQ83 wrote:

Passenger traffic in May "only" grew by 22.3%, compared to +70.0% :O in January or +61.7% in April.

In any case January-May had 2.842.341 passengers, which is more than the full 2012 (2.764.026).

https://www.kefairport.is/English/About ... tics/2017/

Sure, but how much of that is transit traffic and how much is O&D traffic? I assume that virtually all transit traffic is on FI and WOW, the rest is virtually 100% to and from Iceland. If those numbers are also valid for O&D traffic, then it clearly is a bubble. There is no population growth, GDP growth or anything, neither in Iceland itself, nor in Europe or North America that justifies that traffic growth, other than a hype for travel to Iceland. And hypes, as we all know, come and go.

Iceland had 5% GDP growth in 2016, by far the highest growth rate in Western Europe.

Sure, but we're talking about a 70% growth Year-on-year in January... To me it looks like a familiar scenario in Iceland. 10 years ago it was the banks. Today, it's tourism...maybe..

DutchyWilliam · Thu Jul 20, 2017 12:10 am

I do think there's room for KLM or (maybe more likely) Transavia to jump in from AMS. Tourism to Iceland is growing fast and FI and WW have grown significantly at AMS the past couple of years.

hvusslax · Thu Jul 20, 2017 12:13 am

MalevTU134 wrote:
hvusslax wrote:
MalevTU134 wrote:
Sure, but how much of that is transit traffic and how much is O&D traffic? I assume that virtually all transit traffic is on FI and WOW, the rest is virtually 100% to and from Iceland. If those numbers are also valid for O&D traffic, then it clearly is a bubble. There is no population growth, GDP growth or anything, neither in Iceland itself, nor in Europe or North America that justifies that traffic growth, other than a hype for travel to Iceland. And hypes, as we all know, come and go.

Iceland had 5% GDP growth in 2016, by far the highest growth rate in Western Europe.

Sure, but we're talking about a 70% growth Year-on-year in January... To me it looks like a familiar scenario in Iceland. 10 years ago it was the banks. Today, it's tourism...maybe..

Perhaps. A lot of people are convinced that the whole thing will come crashing down any day now. Personally, I think that line of thinking smacks of illogical fatalism. Just because a previous period of high growth ended with a catastrophic crash doesn't mean that this current period of high growth will come to a similar end. The economic factors driving these two growth periods are very different. Of course there will be a slowdown but barring some catastrophic event I don't see tourism collapsing any time soon.

mjoelnir · Thu Jul 20, 2017 12:35 am

There has been a slow done in growth of tourism this year. A slow down, but still growing.. The growth is now mainly off season. Banks have slowed lending for new hotel projects. Regarding KEF, transfer pax numbers have been growing faster than O&D.

MalevTU134 · Thu Jul 20, 2017 2:09 am

hvusslax wrote:
MalevTU134 wrote:
hvusslax wrote:

Iceland had 5% GDP growth in 2016, by far the highest growth rate in Western Europe.

Sure, but we're talking about a 70% growth Year-on-year in January... To me it looks like a familiar scenario in Iceland. 10 years ago it was the banks. Today, it's tourism...maybe..

Perhaps. A lot of people are convinced that the whole thing will come crashing down any day now. Personally, I think that line of thinking smacks of illogical fatalism. Just because a previous period of high growth ended with a catastrophic crash doesn't mean that this current period of high growth will come to a similar end. The economic factors driving these two growth periods are very different. Of course there will be a slowdown but barring some catastrophic event I don't see tourism collapsing any time soon.

Well, I guess that is part of my question...does it take a catastrophic event, as you say, or will it simply suffice that some other destination suddenly is the "in" destination and, consequently, Iceland is, well, out?... Is it simply fashionable to travel to Iceland right now? (And please don't get me wrong, I have visited marvellous Iceland over 20 times, there's nothing like it on the planet, its people, nature, literature, history, the best fish in the world...it is definitely understandable if people visit!!)

globalcabotage · Thu Jul 20, 2017 2:53 am

Slots!

willenglish · Sun Jul 23, 2017 9:36 pm

I can definetly see WW starting KEF-YHZ and compete with FI, also see them starting TPA/MCO once they get more of their A321N fleet... so I like more WW expansion, and i like their buisness model target as well... nice to see the growth there.

klm617 · Sun Jul 23, 2017 10:22 pm

Hopefully Detroit will get linked to KEF in the summer of 2018. But I do believe the window of opportunity has passed for any more North American additions . It's a shame places like CLE, STL, DTW and the like have gotten passed over for some of these low coast options as they surely could have supported them.

klm617 · Sun Jul 23, 2017 10:28 pm

willenglish wrote:
I can definetly see WW starting KEF-YHZ and compete with FI, also see them starting TPA/MCO once they get more of their A321N fleet... so I like more WW expansion, and i like their buisness model target as well... nice to see the growth there.

I would venture to say that in 5 years from now WW will have ceased to exist.

kelvin933 · Sun Jul 23, 2017 10:33 pm

The actual rumors in Iceland are that WOW will start at least two new routes to Asia in 2018, KEF-DEL and KEF-PVG using the new A330-900.
Both routes should have reasonable connection times to the North America bank.

AV8AJET · Mon Jul 24, 2017 4:14 am

I would Love to see a KEF-ATL flight!

texdravid · Mon Jul 24, 2017 4:42 am

DFW-KEF, summer seasonal on AA or Iceland Air. Dallas people would love to leave the heat in the summer and the populace is wealthy and loves to travel.

Not necessarily daily, too

PatrickZ80 · Mon Jul 24, 2017 5:53 am

Iceland is really booming these days, but the thing that hits me is that there's almost no spreading among airports. Every airline flying to Iceland flies to Keflavik. Of course that's the biggest airport, but this way it's getting full rather quickly. I'm surprised no airline has chosen to fly to Akureyri instead. Doesn't have to be daily, but I think there's a market there.

Here in the Netherlands of course the most traffic goes to Amsterdam, but airlines are very aware that the Netherlands is bigger than the catchment area of Amsterdam and there are regional airports such as Eindhoven to cover that area outside the catchment area of Amsterdam. How come that's not the case in Iceland?

SCQ83 · Mon Jul 24, 2017 7:20 am

kelvin933 wrote:
The actual rumors in Iceland are that WOW will start at least two new routes to Asia in 2018, KEF-DEL and KEF-PVG using the new A330-900.
Both routes should have reasonable connection times to the North America bank.

That is crazy! What about KEF-IST or KEF-DXB? I think those routes could work, specially Dubai.

texdravid wrote:
DFW-KEF, summer seasonal on AA or Iceland Air. Dallas people would love to leave the heat in the summer and the populace is wealthy and loves to travel.

Not necessarily daily, too

It is surprising that American or United do not fly to Iceland. Let's not forget that Delta is up to 3 daily flights to KEF in some days this summer (2xJFK and 1xMSP). And Air Canada has started flights to YYZ and YUL; so Toronto is now up to 4 daily (2xFI, 1xWW, 1xAC).

Iceland-North America is not only about Icelandair and WOW.

AirbusOnly · Mon Jul 24, 2017 7:26 am

klm617 wrote:
willenglish wrote:
I can definetly see WW starting KEF-YHZ and compete with FI, also see them starting TPA/MCO once they get more of their A321N fleet... so I like more WW expansion, and i like their buisness model target as well... nice to see the growth there.

I would venture to say that in 5 years from now WW will have ceased to exist.

Why?

MalevTU134 · Mon Jul 24, 2017 9:15 am

SCQ83 wrote:
kelvin933 wrote:
The actual rumors in Iceland are that WOW will start at least two new routes to Asia in 2018, KEF-DEL and KEF-PVG using the new A330-900.
Both routes should have reasonable connection times to the North America bank.

That is crazy! What about KEF-IST or KEF-DXB? I think those routes could work, specially Dubai

Why is it crazy? No North American airline can make IST or DXB, partly due to the overwhelming competition from TK and EK, respectively. Also, East coast and midwest US- PVG/DEL is no major detour through KEF. I think it's pretty innovative and clever. Not to mention the building up of interest for Iceland as a tourist destination in China and India.

MalevTU134 · Mon Jul 24, 2017 9:19 am

PatrickZ80 wrote:
Iceland is really booming these days, but the thing that hits me is that there's almost no spreading among airports. Every airline flying to Iceland flies to Keflavik. Of course that's the biggest airport, but this way it's getting full rather quickly. I'm surprised no airline has chosen to fly to Akureyri instead. Doesn't have to be daily, but I think there's a market there.

Here in the Netherlands of course the most traffic goes to Amsterdam, but airlines are very aware that the Netherlands is bigger than the catchment area of Amsterdam and there are regional airports such as Eindhoven to cover that area outside the catchment area of Amsterdam. How come that's not the case in Iceland?

You do know that Akureyri is a town of roughly 13,000 inhabitants? Can't compare that to Eindhoven... While the airport could handle the flights, no doubt, the local infrastructure (hotels, etc.) couldn't. The vast majority of visitors to Iceland still stay in the southwestern portion, around Reykjavík.

hvusslax · Mon Jul 24, 2017 9:45 am

MalevTU134 wrote:
PatrickZ80 wrote:
Iceland is really booming these days, but the thing that hits me is that there's almost no spreading among airports. Every airline flying to Iceland flies to Keflavik. Of course that's the biggest airport, but this way it's getting full rather quickly. I'm surprised no airline has chosen to fly to Akureyri instead. Doesn't have to be daily, but I think there's a market there.

Here in the Netherlands of course the most traffic goes to Amsterdam, but airlines are very aware that the Netherlands is bigger than the catchment area of Amsterdam and there are regional airports such as Eindhoven to cover that area outside the catchment area of Amsterdam. How come that's not the case in Iceland?

You do know that Akureyri is a town of roughly 13,000 inhabitants? Can't compare that to Eindhoven... While the airport could handle the flights, no doubt, the local infrastructure (hotels, etc.) couldn't. The vast majority of visitors to Iceland still stay in the southwestern portion, around Reykjavík.

The local tourism sector disagrees. They want more direct international flying to Akureyri. The infrastructure can take it and there is lots of untapped potential compared to the southwest. Especially in winter. People visit Iceland primarily for the natural sights so there is no reason why everyone needs to be funneled through KEF and Reykjavík.

klm617 · Mon Jul 24, 2017 4:33 pm

MalevTU134 wrote:
SCQ83 wrote:
kelvin933 wrote:
The actual rumors in Iceland are that WOW will start at least two new routes to Asia in 2018, KEF-DEL and KEF-PVG using the new A330-900.
Both routes should have reasonable connection times to the North America bank.

That is crazy! What about KEF-IST or KEF-DXB? I think those routes could work, specially Dubai

Why is it crazy? No North American airline can make IST or DXB, partly due to the overwhelming competition from TK and EK, respectively. Also, East coast and midwest US- PVG/DEL is no major detour through KEF. I think it's pretty innovative and clever. Not to mention the building up of interest for Iceland as a tourist destination in China and India.

Because DXB and IST are connection points North Americans as a whole do not visit these cities so DEL and PEK make more sense to me.

klm617 · Mon Jul 24, 2017 4:36 pm

AirbusOnly wrote:
klm617 wrote:
willenglish wrote:
I can definetly see WW starting KEF-YHZ and compete with FI, also see them starting TPA/MCO once they get more of their A321N fleet... so I like more WW expansion, and i like their buisness model target as well... nice to see the growth there.

I would venture to say that in 5 years from now WW will have ceased to exist.

Why?

Because they are entering over saturated markets that they have no control over pricing the need to attack more untapped markets. The are doing the exact same thing Iceland Express did and where are they now. They need to not follow the crowd and be a pioneer in low cost international travel. We will revisit this post 5 years from now and see who was right and who was wrong. You see what FI dis they went to places like ANC, PDX, MSP and DEN where they don't have to fight for market share where there is little or no international competition much better business plan.

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