CASE STUDY Tracking fuel efficiency at Icelandair: from data to 247 percent fuel savings growth

Author: Helga S. Thordersen Magnusdottir, Program Manager Fuel Safety & Efficiency, Icelandair

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Helga S. Thordersen Magnusdottir, Program Manager Fuel Safety & Efficiency at Icelandair offers an insight to using an innovative AI-Powered fuel monitoring and analysis tool

In this article, I aim to share with readers how Icelandair uses a modern solution for tracking the performance of fuel efficiency initiatives. Since joining the fuel efficiency team at Icelandair, I’ve been leading the development and implementation of data-driven strategies to reduce fuel consumption and enhance sustainability across the airline. Our work is driven by a passion for innovation, contributing to Icelandair’s progress in fuel savings and operational excellence. I’ll look at how Icelandair is, turning data into action, identifying new saving opportunities, improving performance and delivering measurable results. But first, a brief introduction to the airline itself.

ICELANDAIR

The airline is the flag carrier of Iceland. With more than 3,500 employees, Icelandair is the largest private employer in Iceland and, as you can see in figure 1, flew more than four million passengers in 2024.

Figure 1

The passenger Network gives us access to four markets: to Iceland, from Iceland, via Iceland and within, Iceland. We operate in many markets, such as the UK, Scandinavia, mainland Europe, US and Canada. It’s beneficial to operate in diverse markets and to utilize the flexibility of our route network to adapt to market developments and to maximize revenue. We can easily shift focus between markets, if needed and when opportunities emerge. Figure 2 shows our growth in all markets.

Figure 2

Capacity, measured in available seat kilometers (ASK), increased by seven percent while passenger numbers in all markets increased by nine percent. Passengers to Iceland increased by three percent and from Iceland by seven percent, while passengers traveling via Iceland increased by 21 percent. In recent quarters, we have seen the highest growth in the ‘via Iceland’ market, while passengers within Iceland fell by five percent, mainly due to weather-related cancellations during the quarter.

We continue to make important steps in our sustainability journey and our relative CO₂ emissions have decreased by six percent between Q1 2024 and Q1 2025, driven by an increase in flights operated by the fuel-efficient Boeing 737-Max and Airbus 321LR, higher load factors, and good performance of our fuel efficiency program.

Looking into 2025, you can see in figure 3 that Icelandair is planning around eight percent growth in their passenger network.

Figure 3

Our growth will be focused on the off-peak season and on off-peak hours in the day. This will both improve our resource utilization and offer our customers more travel options than ever before.

Some people say that Iceland is in the middle of nowhere but, in fact, it is in the middle of everywhere as figure 4 shows.

Figure 4

It is the unique location of the country that is the fundamental strength of Icelandair and the core of our business model, where we connect the continents via Iceland. Additionally, we leverage the vibrant culture and stunning nature in Iceland to further enhance and sell our product. Over the long history of Icelandair, the country’s exceptional location has been utilized to establish an extensive hub and spoke model by operating fuel-efficient narrowbody aircraft between Europe and North America. This business model opens possibilities to connect markets that may never have direct flights, and the most efficient one-stop connection is often via Iceland.

By operating this network at Iceland’s Keflavík International Airport (KEF), we are able to serve a huge number of markets in a very efficient way. The utilization of our fleet is among the highest in the world, as the planes can fly up to 19 hours per day, with a round trip flight to Europe in the morning, followed by a flight to North America in the afternoon and returning to Europe the next morning. This has been and is still is the foundation of what we do. Icelandair has always focused on reliable and efficient operations, but operating in today’s aviation landscape is about more than just getting from point A to B. Rising fuel costs, environmental responsibilities and increasing regulatory expectations make fuel efficiency not just a cost concern, but a strategic priority.

THE IMPORTANCE OF FUEL EFFICIENCY

That’s why fuel efficiency is embedded into our daily operations, long-term planning and cross departmental collaboration. Fuel efficiency is vital for several reasons.

• Environmentally, it helps reduce our carbon footprint and comply with global emissions regulations.
• Economically, it lowers operational costs, making us more competitive.
• Operationally, it enhances flight performance and safety, and our commitment to fuel efficiency is integral to our sustainability and success.

Icelandair has, for a long time, understood the value of fuel efficiency, not just for cost control, but for environmental responsibility and operational excellence.

To that end, we’ve been leveraging SkyBreathe^® fuel monitoring software from OpenAirlines since 2011, which means we’ve had over a decade to build a strong foundation based on data, transparency and continuous learning.

ICELANDAIR’S FOUNDATIONS FOR FUEL EFFICIENCY

Over the years, we have gradually rolled out best practices across our operations, from cockpit procedures to ground operations, ensuring that every team is part of the effort, and the research speaks for itself. Since 2018 our total fuel savings have increased by 247%. I should also mention here that we had a very similar flight schedule in 2019 and 2023. The question now is, how do we go the extra mile? What can we do next to turn good performance into a great performance? That’s what I want to share in this article.

The pie chart in figure 5 shows a clear breakdown of where most of our fuel savings were coming from in 2024 based on SkyBreathe^® data.

Figure 5

It’s a valuable insight, not only for us internally, but also to share with our pilots, to recognize their efforts and keep encouraging best practices. As you can see, the biggest contributors to savings have been Continuous Descent Approach (CDA) and Alternate Fuel; together, these account for the largest portion of our fuel savings. Reduced Acceleration Altitude also represents a significant share. Then we have a smaller yet still important contribution from Idle Reverse Thrust, Engine Out Taxi-In and Out, APU off while taxiing out and in, and Pilot Discretionary Fuel. As you can see from the pie chart, pilot best practices like CDA, and alternate fuel are making a real impact.

FUEL EFFICIENCY INITIATIVES

To support and accelerate this progress, in 2024 Icelandair took the important step of establishing a dedicated flight product team. This team brings together experts from multiple departments, creating a cross-functional group focused on one goal: driving fuel efficiency and operational improvements. By combining perspectives from different areas of the business, the team strengthens collaboration, ensures alignment and breaks down silos that can slow down progress.

One of the biggest advantages is the ability to act quickly, implementing ideas, responding to feedback, and testing new solutions much faster than before. And importantly, the flight product team is becoming a central hub for continuous improvement through close cooperation and use of data, we are able to quickly identify challenges, track performance and make informed decisions that contribute directly to fuel savings and operational excellence.

The examples in figure 6 highlight how data and teamwork are driving real, massive improvement across our operations and what is planned next.

Figure 6

In recent years, we have implemented several key initiatives that are already delivering fuel savings that are tracked in SkyBreathe^®. For example, we have improved Zero-Fuel Weight planning by using expected passengers to board, instead of booked passengers, and have started sharing actual cargo weight earlier. We’ve also looked at APU usage on-ground and targeted follow-up at airports where performance was low.

Looking ahead, we have more improvements in the pipeline, from using future features in SkyBreathe^® like NewGen APM (Aircraft Performance Monitoring) to optimizing a couple of operation’s initiatives. Each of these initiatives reflect our strategy: using data from SkyBreathe^® to identify weak spots, collaborate across departments and act fast. Figure 7.1 shows the trend of our CO₂ emissions per operational kilometer, one of our core KPIs (Key Performance Indicators).

Figure 7.1

The four percent year to date reduction in 2024 compared to 2023 is driven by the introduction of more fuel-efficient aircraft and the ongoing success of our fuel efficiency program.

Fuel index, another KPI we track, as in figure 7.2, is normalized for payload and enabling more accurate like for like, comparisons of fuel efficiency across flights.

Figure 7.2

Our goal for 2024 was to reduce the fuel index by 0.5 percent but we exceeded this with a 1.29 percent decrease compared to 2023. This improvement contributes directly to lowering fuel consumption and reducing our environmental footprint. The fuel index improvement in 2024 reflects the impact of several fuel efficiency initiatives established throughout the year.

The first initiative I’d like to introduce is the switch from Long Range Cruise (LRC) to Cost Index Zero for alternate planning. This change, implemented in 2024, requires minimal operational effort, but results in lighter aircraft weight which directly contributes to fuel savings and improved efficiency.

We developed a custom query in SkyBreathe^® Analytics, specifically tailored to monitor the switch from Long Range Cruise to Cost Index Zero for alternate planning, this query allows for easy export to Excel, enabling deeper analysis. Fuel savings are calculated monthly to ensure consistent tracking and accurate reporting. In the example in figure 8, the aircraft is on average, 130 kilos lighter this year compared to last year.

Figure 8

Maximize single engine taxi-out: what was the problem?

The second fuel efficiency initiative, Single Engine Taxi-Out was introduced and trained across the Boeing 737-MAX fleet, with training completed in early 2023. Following its implementation, application increased, but a decline was observed in 2024, as you can see in figure 9.1.

Figure 9.1

Single Engine Taxi-Out involves additional workload for pilots as it is more complex than taxiing with both engines running. In certain situations, such as operating from airports with steep inclines, or when the aircraft is fully loaded, there may not be enough thrust to move the aircraft with one engine, which can lead to operational challenges. So, some pilots may have experienced such limitations first-hand, while others may have heard of the situation and decided to not even attempt it. This is a procedure that needs to be practiced, gaining full confidence when applying it and with the knowledge that some airports are better suited for it than others.

Maximize single engine taxi-out: what is the future state?

In July last year, we did two things to try to increase the application rate of Single Engine Taxi-Out. Both required minimal effort and cost as you can see in figure 9.2.

Figure 9.2

Firstly, our former VP flight operation sent out a fuel efficiency email to our pilots where Single Engine Taxi-Out was highlighted, among other things. The engine-out taxi-out intranet group was introduced in this email. This intranet group was established to host discussions on engine-out taxi-out, where pilots can share their experience from different airports. Through these discussions, we can add important information into our company crew information or CCI pages in our flight planning system for appropriate airports, since our pilots access these pages before every flight.

What I post on this intranet group is, for example, the engine-out taxi-out application rate, how much has been saved, or how we are performing compared to other airlines at every single airport. As a result, we are constantly reminding our pilots about this best practice. Currently, we are seeing encouraging progress in the adoption of engine-out taxi-out. We have been successful in engaging our pilots with this best practice, and this is clearly reflected in figure 9.2. The application rate has been steadily increasing and is now significantly higher in recent months compared to the same period last year. This positive trend highlights growing pilot confidence and continued commitment to fuel-saving initiatives.

It takes time to build confidence and reach everyone, but we are seeing an increase in annual savings on this best practice. We are not only burning less fuel due to reduced engine runtime, but it also improves our on-time performance because we are able to start taxiing sooner. As a result, our aircraft do not block other aircraft while waiting for both engines to be up and running.

Optimizing alternate fuel planning

Another opportunity we found to improve was optimizing alternate fuel planning as in figure 10.

Figure 10

We identified and corrected cases where the flight planning system significantly overestimated the great circle distance between destination and alternate airports. This led to unnecessarily high Alternate Fuel planning. We updated 13 city pairs with more accurate diversion distances. For example, when Paris Orly is used as an alternate for Charles de Gaulle, the actual great circle distance is 18 nautical miles; however, the system had been planning an average of 134 nautical miles. A new company route was established, setting the distance to 55 nautical miles, a more realistic value. This adjustment results in reduced fuel uplift and lighter aircraft, and therefore lower fuel burn.

To measure the impact of the adjusted alternate planning, a custom query was made in SkyBreathe^® Analytics. The data is filtered to include only flights affected by the updated alternate planning logic. Fuel savings are calculated quarterly, normalized by aircraft type and route, ensuring consistent and meaningful comparison. A noticeable weight reduction has been observed with the aircraft being on average approximately 150 kilos lighter, contributing directly to lower fuel burn.

Delayed APU start

We also focused on delayed APU (Auxiliary Power Unit) start when taxiing in, which has long been a standard best practice on our Boeing 757, and Boing 767 fleets. However, due to initial concerns about loadshedding on the Boeing 737-MAX, a careful assessment was conducted before implementation. Using SkyBreathe^®, we estimated the potential fuel and maintenance savings. The trial phase was conducted by a group of pilots to validate operational feasibility. Following the successful trial, this procedure was implemented fleet-wide on the Boeing 737-MAX in February 2025. Following its implementation on the Boeing 737-MAX fleet, the application rate of delayed APU start, while taxi-in best practice has seen a steady increase. This reflects growing pilot engagement and operational confidence in this procedure. The impact has been clearly visible in SkyBreathe^® data, showing consistent fuel savings and reduced maintenance costs. Notably, the estimated benefits calculated prior to implementation have closely matched the actual savings, confirming the effectiveness and accuracy of our assessment process.

Improve Zero Fuel Weight (ZFW) planning

Last year, the Benchmark module in SkyBreathe^® revealed that Icelandair was underperforming in ZFW planning accuracy compared to peer airlines. This issue was evident in both passenger and cargo operations, where a consistent gap was observed between the estimated and actual zero fuel rate.

As a result, excess fuel was often loaded unnecessarily, leading to inefficient flight planning and higher fuel consumption. These findings pointed to a clear opportunity for improvement in weight estimation practices, with the potential for meaningful gains in fuel efficiency. In 2023, as you can see in figure 11, cargo operations showed on average, a difference of approximately 700 kilos between estimated and actual ZFW, which negatively affected fuel planning accuracy.

Figure 11

The root cause was identified as a late delivery of final cargo data, leaving dispatch unable to update flight plans in time. To address this, a new procedure was implemented in 2024 requiring dispatch to receive final cargo figures at least two hours and 30 minutes before estimated departure. As a result, by 2025 the average ZFW discrepancy has been reduced to around 200 kilos. This change has led to more accurate ZFW inputs, reduced fuel overestimation and, ultimately, more efficient and precise flight planning.

Continuous efforts are underway to improve ZFW accuracy in passenger operations as you’ll see in figure 12.

Figure 12

In June 2024, flight planning inputs were adjusted to use the expected number of passengers to board rather than the number of booked passengers, providing a more realistic weight estimate. Further enhancements followed in May 2025, including earlier availability of actual baggage weight which is now provided 45 minutes before the estimated time of departure, compared to 30 minutes before. Additionally, the rules for estimating baggage weight were refined for passengers using the self-service check-in. Together, these updates are designed to reduce ZFW estimation error and help avoid excess planned fuel, improving both accuracy and operational efficiency.

We have also been highlighting APU usage on the ground, and we made a dashboard in SkyBreathe^® which provides detailed visibility into APU usage on the ground across the network, with flexible filtering options, such as by flight group, for example, Scandinavia, Southern Europe, USA, etc., so station managers can easily identify underperforming airports and take targeted corrective actions. This level of transparency supports local follow-up, promotes accountability and drives continuous improvement in APU efficiency through actionable data insights.

SkyBreathe^® MyFuelCoach

Lastly, since January 2025, pilots have been receiving a personalized fuel achievement snapshot via email each month as seen in figure 13.

Figure 13

These snapshots highlight the top three fuel savings best practices they applied and show how much fuel was saved compared to the full potential. This initiative has led to a noticeable increase in pilot engagement with SkyBreathe^® MyFuelCoach, where pilots can track their personal progress over time, set individual goals and stay motivated through clear data-driven feedback. By making fuel efficiency personal and visible, we have strengthened pilot ownership and motivation in contributing to our sustainability goals.

Future initiatives

In the next phase of our fuel efficiency program, we will leverage SkyBreathe^® New Gen APM to support a range of advanced data driven initiatives. These include performance-based tail assignment, where we ensure that the most fuel-efficient aircraft is matched to each mission; that is add fuel factor constraints when choosing which aircraft operates each route, or in other words, low fuel factor aircraft operate longer routes, while high fuel factor aircraft operate shorter routes when possible. On the other hand, we will use the SkyBreathe^® NewGen APM to track fuel savings from the initiative; optimization of engine core wash intervals.

Additional focus areas will include potable water optimization, center of gravity and load control enhancements, and including fuel efficiency best practice recommendations into our flight plans. Together, these initiatives aim to further reduce fuel burn, enhance operational performance and support long-term sustainability goals.

CONCLUSION

Our journey towards greater fuel efficiency continues to be powered by data, technology and strong cross-functional collaboration. The SkyBreathe^® tools have been instrumental in tracking performance, identifying weak spots, and turning insights into action. Through teamwork, we have achieved measurable fuel savings and made significant strides in areas like Zero Fuel Weight planning, we have learned, adapted and improved, and we are not stopping here. Icelandair remains fully committed to ongoing innovation and continuous progress on our path to more sustainable operations.