Icelandair ehf is the main airline of Iceland, based on the grounds of Reykjavík Airport in Reykjavík. It is part of the Icelandair Group and currently operates scheduled services to 33 cities in 13 countries on both sides of the Atlantic Ocean out of its hub at Keflavík International Airport. The geographical position of Iceland thus allows for one-stop transatlantic flights, which is one pillar of the airline's business strategy, along with traffic to and from the country.

In 2011, Icelandair transported 1,750,000 passengers, an increase by 18 percent compared to 2010.

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 had to be grounded when the aircraft was destroyed in a capsizing accident. The company moved to Reykjavík, were 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.