Business: Sparrow in the Treetop

As the eagles of the airline business wheel over the rich North Atlantic market, a tiny sparrow in their midst is flitting off with a beakful of their business. Icelandic Airlines has four vintage DC-4 Skymasters whose seven weekly flights between Europe and the U.S. are so jammed that the wait list runs clear into mid-October. Reason: while mounting costs force every other line to plug, for fare increases, Icelandic’s rates are some $100 cheaper than those of its competitors, have pushed the lean little line from 400 passengers in 1952 to an expected 30,000 this year, with revenues of close to $6,000,000. up some 25% from last year.

Glaciers & Gliders. What put Icelandic across is its happy niche as a freewheeling outsider in the carefully regulated air transport business. Every other scheduled transatlantic line belongs to the International Air Transport Association, which sets industry-wide fares for one and all. Icelandic is outside I.A.T.A. With its lumbering, low-overhead DC-45, it flies round trip from New York to London for $469.20 (v. $522 for bigger lines), New York to Oslo for $472.20 (v. $590.60). Says Nicholas Craig, president of the line’s U.S. subsidiary, which operates the transatlantic business: “For years the airlines have talked about bringing trans-ocean travel within reach of everybody’s pocketbook. We’ve done something about it.”

The only private, nonsubsidized European airline, Icelandic is a homegrown business, owned by 700 stockholders in Iceland. Beginning in 1944, when two young Icelanders who had flown with Canada’s R.C.A.F. trudged across the country’s largest glacier to salvage a crashed Stinson seaplane, it started out as a creaky air service between coastal fishing villages, sent its first DC-4 from Reykjavik to Copenhagen in 1947. It got a transatlantic permit from the U.S. Civil Aeronautics Board in 1952, and chose Nick Craig, a Pan American sales executive, as board chairman, president and chief executive. “I did everything but fly the planes,” says Craig. Flying the planes, as stipulated by the country’s lawmakers, is a job performed entirely by Icelanders, many of. whom started as glider pilots. The line’s 32 stewardesses have the island’s most sought-after female jobs.

Teachers & Turboprops. Most of Icelandic’s passengers are people who, like the line itself, want to make a lot out of a little—Scandinavian-Americans off to visit relatives or settle down in the old country on small pensions, U.S. teachers, clergymen and students whose travel plans are big but funds small. They poke along in unpressurized DC-45 at 8,000 ft., doing 220 to 240 m.p.h. v. 350 m.p.h. for DC-7s. At times, the trips take five hours longer than on other lines. Yet Icelandic’s seven-man crews take care to fly around the weather, have a 100% safety record.

Now Icelandic is negotiating for a sizable loan from the Export-Import Bank to buy new equipment, hopes to have two turboprop airliners on its Far North routes by 1959. Since faster, bigger planes will bring higher revenues, Icelandic expects to keep bargain fares for years to come. Says Craig: “They call us cut-rate, and I’m proud of it.”