Loftbrú, Iceland’s government subsidy for airfares between the capital and rural areas, will change how it discounts tickets from next New Year’s Day. The aid will take the form of a flat 7,000 ISK reduction per flight leg, or 14,000 ISK for return trips, replacing the previous percentage-based discounts. The change, reported by Vísir, affects about 62,000 rural inhabitants eligible for the programme and responds to recent budget overruns.
According to the Government of Iceland, this will be the only change made to Loftbrú for now: eligibility and other rules remain the same, and eligible residents can still use up to six discount codes each. In recent years Icelanders have bought around 80,000 tickets or more using these codes, with about 600 million ISK allocated annually to Loftbrú. This funding has not changed, despite costs exceeding budget estimates and requiring supplementary appropriations in 2023–2025. In 2025, expenditures ran roughly 140 million ISK over plan.
Government representative Eyjólfur Ármannsson said the change aims to preserve Loftbrú’s positive effects while bringing costs under control. It will make costs more predictable and keep spending within the budget frame. Under the new arrangement, early ticket bookers could see their real discount percentage rise, as the fixed sum will represent a greater share of a lower ticket price, but for higher fares, the actual percentage saved will drop. The subsidy level could be reconsidered, with hints it might instead be set at a higher 9,000 ISK per leg, but no official decision has been made.
Local responses to the change have been mixed. Jónína Brynjólfsdóttir, who chairs the municipal council in Múlaþing, a large municipality in eastern Iceland, said she welcomed increased Loftbrú funding but did not approve of altering the subsidy structure. “I do not like it at all,” she said, according to mbl.is. Austurfrétt reports that others in rural areas have been highly critical of the proposed changes.
Background
Múlaþing was formed in 2020 through a merger of smaller municipalities in eastern Iceland. It is the second largest by area in Iceland and includes the Kárahnjúkar Hydropower Plant.
Sources
- Stjórnarráð Íslands (Government of Iceland) in Icelandic
- Vísir (first reported) in Icelandic
- mbl.is in Icelandic
- Austurfrétt in Icelandic
