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Flights - Iceland

Iceland

Iceland is expected to see a significant increase in revenue within the Flights market.
Specifically, revenue is projected to reach €93.29m in 2024, with an anticipated annual growth rate (CAGR 2024-2029) of 5.53%.
This growth is expected to result in a market volume projection of €122.10m by 2029.
Furthermore, the number of users within this market is expected to reach 117.80k users by 2029, with user penetration projected to be 23.2% in 2024 and 30.3% by 2029.
The average revenue per user (ARPU) is expected to reach €1.06k.
Moreover, within the Flights market, it is projected that 94% of the total revenue will be generated through online sales by 2029.
Finally, when compared to global markets, United States is expected to generate the most revenue in this market, reaching €132bn in 2024.
Iceland's flight market is heavily reliant on tourism, with low-cost carriers such as WOW air and Icelandair dominating the market.

Key regions: India, China, Europe, Indonesia, Thailand

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Analyst Opinion

The Flights market in Iceland has experienced significant growth in recent years, driven by a combination of customer preferences, market trends, and local special circumstances.

Customer preferences: Customers in Iceland have shown a strong preference for air travel due to the country's unique geography and remote location. With limited transportation options, flying has become the most convenient and efficient way to travel both domestically and internationally. Additionally, Iceland's tourism industry has boomed in recent years, attracting a large number of international visitors who rely on flights to reach the country.

Trends in the market: One of the key trends in the Icelandic flights market is the increasing number of low-cost carriers entering the market. These airlines offer affordable fares, making air travel more accessible to a wider range of customers. This has led to increased competition among airlines, resulting in lower prices and more flight options for consumers. Another trend is the expansion of routes and destinations served by Icelandic airlines. In recent years, airlines based in Iceland have expanded their networks to include popular tourist destinations in Europe and North America. This has not only made it easier for Icelandic residents to travel abroad, but it has also attracted more international visitors to the country.

Local special circumstances: Iceland's unique geography and small population have played a significant role in shaping the flights market. The country's remote location and harsh climate make air travel the most practical option for both domestic and international travel. Additionally, Iceland's small population means that airlines must rely on attracting international passengers to fill their planes, leading to a focus on expanding international routes and destinations.

Underlying macroeconomic factors: The growth of the flights market in Iceland is also influenced by macroeconomic factors. Iceland's economy has experienced steady growth in recent years, leading to increased disposable income and a greater willingness to spend on travel. Additionally, the depreciation of the Icelandic krona has made Iceland a more affordable destination for international travelers, further driving demand for flights to and from the country. In conclusion, the Flights market in Iceland has experienced significant growth due to customer preferences, market trends, and local special circumstances. The country's unique geography and small population have made air travel the most practical option for both domestic and international travel. The expansion of low-cost carriers and the increasing number of routes and destinations served by Icelandic airlines have made air travel more accessible and affordable for customers. The underlying macroeconomic factors, such as steady economic growth and the depreciation of the Icelandic krona, have further contributed to the growth of the flights market in Iceland.

Methodology

Data coverage:

The data encompasses B2C enterprises. Figures are based on bookings, revenues, and online shares of flights.

Modeling approach:

Market sizes are determined through a bottom-up approach, building on a specific rationale for each market. As a basis for evaluating markets, we use financial reports, third-party studies and reports, federal statistical offices, industry associations, and price data. To estimate the number of users and bookings, we furthermore use data from the Statista Consumer Insigths Global survey. In addition, we use relevant key market indicators and data from country-specific associations, such as demographic data, GDP, consumer spending, internet penetration, and device usage. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, ARIMA, which allows time series forecasts, accounting for stationarity of data and enabling short-term estimates. Additionally, simple linear regression, Holt-Winters forecast, the S-curve function and exponential trend smoothing methods are applied.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change.