AviationNews – Icelandair has announced a major acceleration of its fleet modernization plan, opting to retire its entire fleet of Boeing 767 widebody aircraft by the end of 2026. The move comes as the carrier pivots to end “unsustainable financial performance” and streamline its operations.
The decision, announced during its third-quarter earnings call, moves the 767’s retirement date forward by three years from the originally planned 2029 exit. The airline, which once operated a larger 767 fleet, is down to its final passenger models, which are over 25 years old. The retirement will mark the end of widebody passenger operations for the carrier as it transitions to an all-narrowbody fleet.
The Boeing 767s were the largest aircraft in Icelandair’s fleet, primarily used on high-capacity routes to North America and Europe. However, the airline is now focusing on the efficiency of new-generation narrowbody jets, which better leverage Iceland’s unique geographic position as a transatlantic hub. The carrier will instead bolt its future to a more unified fleet of Boeing 737 MAX and incoming Airbus A321LR and A321XLR aircraft, which offer lower fuel burn and operating costs.
“After eight years of unsustainable financial performance, our focus is clear – to turn the company around to profitable operations, no later than next year,” said Icelandair CEO Bogi Nils Bogason. “To achieve this… we have decided to cease the operation of our widebody Boeing 767 aircraft at the end of 2026.”
This strategic shift will see Icelandair reduce capacity on some North American routes, which have faced intense fare pressure, and redeploy aircraft to markets in Southern Europe and Scandinavia. The fleet simplification is a key part of a transformation program intended to return the airline to full-year profitability by 2026.
By exiting widebody operations early, Icelandair is making a decisive bet on efficiency and network flexibility. The move concludes the 767’s decade-long tenure with the airline and solidifies a new, more cost-effective fleet strategy centered entirely on single-aisle jets.
