Icelandair accelerates Boeing 757 phase-out amid fleet modernization.
Icelandair is set to retire its remaining Boeing 757 fleet earlier than planned as elevated fuel prices accelerate the carrier’s fleet transition.
Speaking at Routes Europe 2026 in Rimini, Italy, Director of Network Planning and Scheduling Snorri Tomasson said the current fuel environment has directly affected the airline’s network and fleet decisions.
“The fuel price situation right now is having a direct impact on our schedule,” Tomasson said. “At the beginning of the year we were anticipating flying the 757s until end of summer 2027, but we will be retiring them this coming winter.”
According to CAPA – Centre for Aviation data, Icelandair currently operates eight active 757-200s, plus another inactive aircraft, alongside three 767-300s.
Tomasson said the airline’s newer-generation fleet is helping preserve routes that may otherwise have become unprofitable in the current environment. “The new generation aircraft will be more fuel efficient, and we will then be able to maintain routes which otherwise would may not be in the network next winter,” he said.
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Icelandair is in the middle of a fleet transition centered on 737 MAX and Airbus A321LR aircraft. The carrier currently operates 21 737-8 and 737-9 aircraft, alongside six A321LRs.
Historically, the airline operated a largely single-type 757 and 767 fleet, but Tomasson said the economics of newer aircraft are reshaping network planning. “The 757s have been great for Icelandair,” he said. “However, they are very high on variable cost. Fuel burn is very high.”
The lower fuel consumption of the newer aircraft is also enabling Icelandair to extend seasonal flying patterns and open thinner markets. Tomasson said routes such as Portland, Oregon, which historically operated only during summer, can now be served during winter because “the unit economics of the LR are just that much better.”
Icelandair expects to receive additional A321LR aircraft through 2027 and plans to introduce A321XLR aircraft toward the end of the decade. The carrier is also adjusting its network structure to accommodate the longer-range narrowbody fleet.
“Our network and bank structure that we have built over decades in our hub in Iceland is kind of not suited for these extra-long-range routes,” Tomasson said. He added that Icelandair has been modifying schedules and bank structures to support current A321LR and future A321XLR operations into North America.
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