Icelandair to retire its Boeing 767 by the end of 2026

Icelandair will end all widebody operations by the close of 2026, moving up the retirement of its three Boeing 767-300 fleet as part of a restructuring plan. The company confirmed the accelerated timeline alongside its third-quarter 2025 financial results.

This move comes as the airline seeks to restore profitability after several years of losses. Icelandair reported $585 million in revenue for the third quarter, a 6% increase, but net profit fell to $57 million, down $12 million from the previous year.

Chief Executive Bogi Nils Bogason stated the company’s primary focus is a return to sustained profitability in 2026. The carrier attributes its rising costs to the strengthening Icelandic krona, increased wages, and broader cost inflation.

Icelandair now plans to retire three Boeing 757s and one 767 by the end of this year and four 757s and two 767 in 2026, leaving only narrowbody types in its active fleet. By mid-2026, the airline expects to operate 41 aircraft, including 21 Boeing 737 MAX jets and seven Airbus A321LRs.

The airline is advancing the simplification of its fleet in response to eight years of unsustainable financial results. Icelandair had previously planned to retire the 767s by 2029, but the new timeline aligns with a strategy to focus on point-to-point markets.

Despite shrinking its fleet, Icelandair projects a 2% capacity increase in 2026. The company notes that these changes proceed even as competitors have exited the Icelandic market.

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