Icelandair CEO reveals why Airbus’ A321LR is the perfect 757 replacement — and why the airline isn’t ditching Boeing

Icelandair will launch its first A321LR on December 10 as it phases out the Boeing 757.

Icelandair has received its first-ever Airbus aircraft, breaking from its all-Boeing fleet for the first time in its nearly 90-year history.

The new A321neoLR planes, which can travel up to nine hours nonstop, were delivered in Reykjavik on December 3. By 2027, the 7 new planes will replace Icelandair’s aging fleet of Boeing 757s.

Icelandair CEO Bogi Nils Bogason told B-17 that the A321LR is the “best replacement” for the inefficient 757s as it is 30% more fuel efficient per seat with a similar capacity.

Icelandair’s first A321LR made its debut in Reykjavik in December.

He also said the Airbus order has nothing to do with Boeing’s ongoing production issues.

“We ran a campaign between Boeing and Airbus in 2022 and finalized that in early 2023 with Airbus,” he said, meaning the deal was signed before the Alaska Airlines 737 Max blowout in January.

The 757 has been the backbone of Icelandair’s operation since 1990, connecting Iceland to North America and mainland Europe. Its smaller size makes it cheaper to fly compared to widebody planes while still providing sufficient capacity to be profitable.

But Boeing never built a replacement for the 757, which was discontinued in 2004. This gave Airbus an opportunity to seize the transatlantic narrow-body market with its long-range A321neo family.

Plenty of other Boeing planes will remain in Icelandair’s fleet. It currently flies 21 Boeing 737 Max aircraft, which it ordered in 2012 before the A321LR or A321XLR were available.

Bogason said a mixed Boeing and Airbus fleet won’t add significant fleet complexity costs. Pictured is a Boeing 737 Max. 

Cirium data shows nearly 22,000 Max flights scheduled for 2024 across cities in Europe and the US. At least 23,000 Max flights are scheduled for 2025, including new routes to Nashville and Istanbul.

“We are operating, on our scale, a very big Boeing fleet into the future, so Boeing continues to be a very important partner of Icelandair,” Bogason said.

Icelandair also flies a small fleet of Boeing 767s on routes where it can carry a lot of cargo alongside passengers. Bogason said these will continue to fly for the “near future.”

Icelandair’s A321LR will fly up to eight hours nonstop

Icelandair’s first passenger A321LR flight took off Tuesday, flying from Reykjavik to Stockholm, with later flights scheduled to Copenhagen.

Cirium data shows that the A321LR will expand to 15 more European cities through 2025, like Rome, Helsinki, Munich, and Zurich. In North America, the jet will fly up to eight hours nonstop to cities including Seattle, Toronto, and Portland, Oregon.

None of these are new Icelandair routes and are already served with Boeing jets, but the A321LR will slowly phase out the 757 or fly alongside the Max to these cities, per Cirium.

Icelandair’s A321LR plane has 187 seats in two cabins: 165 in economy and 22 in “Saga Premium.”

Saga resembles premium economy, featuring large reclining seats with privacy wings, a legrest and footrest, and a 16-inch television screen. The 2×2 cabin does not have lie-flat seats as seen on the A321LR planes flown by JetBlue Airways or Ireland’s Aer Lingus long-haul.

Saga Premium is Icelandair’s version of business class. 

Bogason said this is due to most of its flights being shorter because they stop in Iceland rather than fully crossing the Atlantic.

He acknowledged that flights to cities like Seattle could take eight hours, but equipping and operating planes with different premium cabins would be too complicated and costly.

“We use the same planes in North America and Europe, but many of the European flights are short, so lie flat would not be in a very high demand there,” Bogason said. “There is definitely revenue potential, but we believe we have the right product for our business model and for the locations that that we are in.”

Icelandair does not have lie-flat business class on its A321LR planes. 

Bogason added that the shorter flight times may negate the need for lie-flat business class, but it helps Icelandair earn business from competitor airlines. This is thanks to its stopover program, which allows travelers to stay in Iceland for a few days before connecting beyond Reykjavik.

Bogason said this helps convince travelers to choose one-stop Icelandair over the nonstop transatlantic options.

The A321XLR will complement Icelandair’s A321LR fleet

Icelandair also has 13 A321XLRs on order — an even longer-ranged Airbus narrowbody variant — that will also act as replacements, but the first is not expected to be delivered until 2029.

Bogason said the A321XLR will allow Icelandair to fly even further and open new routes.

“We could fly the new narrowbody into California, into Texas, and into the East from Iceland,” he said. “This creates a lot of opportunities for the development of our network and our business model.”

More than a dozen global airlines, including American Airlines, Spanish flag carrier Iberia, Hungary’s Wizz Air, and United Airlines, have placed more than 550 orders for the new A321XLR.

Lie-flat business class on Iberia’s A321XLR. It operated the world’s first A321XLR passenger flight in November.

Similar to Icelandair, United is planning to use the extra-long-haul jet as a replacement for a 757 and launch new nonstop flights to destinations like West Africa and Northern Italy.

Thanks to its extra fuel tank, the A321XLR can fly 800 miles further than the A321LR and open new routes previously unreachable with narrowbodies or unprofitable with widebodies.

Bogason did not reveal any details about Icelandair’s expected A321XLR cabin, but the jet is versatile. American and United, for example, are equipping the plane with lie-flat business class.

Budget carrier Wizz Air will only offer a no-frills economy cabin on its A321XLRs, which its CEO says passengers will just have to “suffer” through for a cheap long-haul ticket.