Iceland Air Vacation Package Review: plan an Iceland holiday

The Sea Voyager sculpture on the Reykjavik coastline. It looks like a viking ship but is actually a monument to the sun.

Do you dream of chasing the northern lights, bathing in the blue waters of Iceland’s spa and exploring the geysirs and waterfalls of the beautiful country of Iceland? 

One of the easiest ways to do so is to book a package tour with Iceland Air. With the country’s flag carrier airline, you can organize your flights, hotel and some excursions for one rate.

But are Iceland Air holidays worth doing? Or is it cheaper to simply book all the components independently?

I’m breaking it down in this full Iceland Air vacation review. Whether you’re flying from the UK or USA, this review will assess the pros and cons to booking your trip with Iceland Air.

What are Iceland Air holiday packages?

Iceland Air Vacation Packages (or holiday packages if you’re in the UK!) are package trips where you book your flights, accommodation, and some trips together.

You can also book your airport transfer at the same time, although this isn’t usually included.

What do IcelandAir vacation packages include?

View of landing into Iceland from the airplane

Iceland Air holiday packages include the following:

Our experience with Iceland Air Holidays

We decided to try out Iceland Air holiday packages on our January trip to Reykjavik to see how it all worked and so I could write this full Iceland Air review!

We booked the northern lights and blue lagoon package and booked FlyBus from the airport to Reykjavik city center, which came to £700 ($867 USD), and received a booking confirmation shortly after. 

Everything went smoothly; we enjoyed the flights, our hotel was good (further than the center than we would have liked, but that could happen anywhere!), the tour providers were ready to pick us up at the right time and we used our email package confirmation to get entry to the tours.

The flight

The plane view from the window at Heathrow

We arranged our seats when we booked the flight, so we knew that we had the seats that we wanted.

We didn’t need to drop off any baggage, so I checked in online the day before the flight, and already had my boarding pass ready to go.

The flight was spacious and roomy, with seats with lots of leg room, screens in the back of the seats in front of us and trolley service offering soft drinks (including fresh Icelandic drinking water!).

The staff were friendly and helpful and before we knew it, we were landing in the frozen country just as the sun was setting.

Upgrade to Saga class

A few weeks before the flight we got some emails about upgrading to Saga Class

You can do this on a bidding system, where you state how much you’re prepared to pay and if your bid is the highest, they’ll accept it.

I was tempted to try it out, but the minimum bid you could make was about £150/ $186 USD – which, for a 2.5 hour flight, didn’t really seem worth it.

Saga class perks include priority boarding, priority check-in, larger and more comfortable seats, a complimentary meal, two checked bags and lounge access.

It might be worth looking into if you want to start your trip in style, but I did find the plane in general to be quite comfy and spacious, so I’d personally save my cash for more tours and Icelandic fun!

The transfer

The FlyBus, which you can take from Reykjavik airport to the city centre

We’d pre-booked the transfer with Iceland Air, although this isn’t essential; you can book it on Get Your Guide or even at the airport itself.

We showed our ticket at the FlyBus stall at the airport, and they gave us another ticket and told us to get on the bus, which was waiting outside.

The bus left after 15 minutes or so, and the driver explained that we’d be picked up from the main Reykjavik Bus Station and taken to the hotel.

The hotel

There are quite a few hotels that you can stay at on the Iceland Air package, including Hilton Reykjavik Nordica, Center Hotels Plaza, Center Hotels Arnarhvoll and Hotel Borg by Keahotels.

We stayed at the Reykjavik Lights by Kea Hotels, which was a minimalist, bright hotel with chic Scandi vibes.

The rooms were comfy and warm – perfect for Iceland in January (it was so snowy in Reykjavik!) – and the showers were powerful, with included toiletries. The decor was fresh, bright and Icelandic-themed.

Breakfast included delicious fresh pastries, like cinnamon swirls and custard tarts, and there was also fresh bread, different types of cheeses, muesli and different types of milk, including oat milk! There was also a cocktail bar in the lobby, along with somewhere to buy snacks.

The tours

Green flashes of Northern Lights with a man standing with a reflective coat in the foreground.

The tours ran with different operators (all of them are bookable on Get Your Guide and other websites).

However, they were organized well by Iceland Air; we were picked up from the hotel each time and the tours all went well.

You can see my individual posts about visiting the Blue Lagoon in winter and seeing the northern lights in January for more information.

You can also read about our Golden Circle tour in winter, but we booked this one separately.

All of these activities apart from the Northern Lights tour are available in the summer – although check out how gorgeous Thingvellir National Park looks when it snows in Iceland below!

Girl standing on the North American tectonic plate at Thingveller National Park on the Golden Circle in Iceland, wearing a beige coat, red and black checked scarf and burgundy hat, with the view of "no man's land" in the background before the Eurasian plate.

Iceland Air Customer Service

Iceland Air’s customer service is available through online chat.

I had a few questions about linking our bookings (as my mum and I paid for our packages separately but wanted to make sure that we were on the same tour and in rooms on the same level), and they answered quite quickly and were easy to deal with.

Iceland Air vacation package vs booking it independently

Sunrise behind Hallgrimskirkja in Iceland

Costs of Iceland Air package

I paid £700 to fly with Iceland Air from London Heathrow to Keflavik Airport return, stay at the Reykjavik Lights Hotel, and do the northern lights and Blue Lagoon tour.

If I was sharing my room at the Reykjavik Lights Hotel, the cost would have been £500 per person.

If you’re flying from the USA, rates start at $878 when sharing a room in a hotel, with rates usually between $900 and $1000. If you have your own room, rates are usually $1100 – $1200.

Costs of booking the trip independently

I’m breaking down all the costs below, but these are the best prices I’ve found for booking exactly the same tours and hotel and flying with lower-cost airlines to Iceland:

  • From the UK, sharing a room: total cost from £446.57
  • From the UK, own room: total cost from £654.57
  • From the USA, sharing a room: cost from $785.88
  • From the USA, own room: cost from $1043.74

Flights from the USA

There are direct flights from New York and Toronto with PlayAir, which is also an Icelandic airline.

The rates are the cheapest, by far, from New York – the most affordable rates I found were $300.

Flights from Toronto are more expensive.

Flights from the UK

The cheapest carrier from the UK to Iceland is EasyJet.

You can get flights from Gatwick, Luton, Manchester, Edinburgh and Bristol to Reykjavik Keflavik airport.

Rates start at just £22, but be aware that this doesn’t include any extras like baggage allowance (even overhead baggage), seat selection or any drinks or food.

The cheapest flights I could find with EasyJet in the next 2-3 months were £55 for a return (and bear in mind that this doesn’t include any extras like baggage, seat selection or drinks.


You can book a range of accommodations on

The hotel we stayed in, Reykjavik Lights by Kea Hotels, has rates starting at £416/ $515.72 USD for two people for three nights, working out to be £208 or $257.86 per person.


The Northern Lights boat tour costs £71.49 on Get Your Guide, and the Blue Lagoon tour costs £112.08.

That’s £183.57 for tours per person.

Click here to see rates and availability for the northern lights boat tour and click here to see rates and availability Blue Lagoon tour.

If you want to add on some extra tours, it’s expensive to do so on Iceland Air. Instead, I’d recommend booking the extra tours on Get Your Guide.

For example, we found it much cheaper to add on this Golden Circle bus tour instead of booking it on Iceland Air.

Sun over the horizon of a beautiful natural landscape at Gullfoss Falls.

Total cost from North America

If you make your own package, with flights with Play Air from New York, accommodation at Reykjavik Lights and the two tours that we booked on Get Your Guide, the total cost would come to $785.88. 

Rates for the Iceland Air packages for the same experience start from $878, so you can get it for around $100 cheaper by booking separately.

Again, Play Air is a budget airline, so you don’t have quite the same experience as traveling with Iceland Air! 

Total cost from UK

So, if you booked flights + the hotel we stayed in + the two tours that we did, it would come to £446.57 if you were sharing the hotel room, or £654.57 if you were in the room by yourself.

So it generally works out to about £50 cheaper, but do bear in mind that you’re flying no-frills with EasyJet – you can add a cabin bag for about £12 but it’ll cost more for a hold bag.


Transfers aren’t generally bookable as part of Iceland Air packages, but you can reserve them at the same time.

They cost about the same as if you reserve them on Get Your Guide or at the airport; their booth is just past passport control and baggage reclaim. 

ATOL Protection

Booking as part of a package deal has the main benefit of ATOL protection. This means that you have more protection if the airline becomes insolvent or there are any other issues surrounding your trip.

Iceland Air package vs booking separately: which is better? 

You can definitely save a bit of money by booking separately, but flying Iceland Air is generally a more premium experience than budget airlines. 

Epic view of the sun setting over a frosty Iceland in the winter

Although these airlines provide more affordable flights, they are slightly less comfortable – so it depends how much comfort means to you on a three to five-hour flight! 

You do also have more protection when booking a package deal.

However, good travel insurance (which you should never travel without, even if you are on a package holiday) should cover this, and hotels on and tours on Get Your Guide have good cancellation policies.

Generally, booking tours through Get Your Guide are cheaper than booking them through Iceland Air. 

Whether you book a package or reserve your tours and flights independently, make sure that you allow plenty of time before you trip to get the cheapest deals.

I’d also recommend booking on a credit card. 

Stopover in Iceland

If you’re flying from the USA to Europe, you can do a stopover in Iceland, even in the dark winter months. 

This involves flying from a European destination to Reykjavik, staying there for a few days and then flying to North America.

However, from a little research on the website, I found that I’m not able to add on hotels and tours to this. If you want to book these flights, you can easily book the hotels and tours that I recommend by clicking on the links below:

View of the quaint yellow lighthouse on the shore of Reykjavik harbour

Iceland Air vacation FAQs

Is Iceland Air a good airline?

Iceland Air is a great airline, with plenty of legroom, entertainment, complimentary drinks and included cabin and hold baggage. There are friendly staff and it’s certified as a 3-Star Airline, with higher than average reviews for its safety, on-board services and timeliness.

Is Iceland Air a cheap airline?

Iceland Air isn’t a budget airline; tickets are generally a few hundred dollars/ pounds and it comes with baggage and included extras. WOW air used to operate from Iceland but they declared bankruptcy in 2019. Nowadays, budget airline EasyJet flies to Iceland.

What type of airline is Icelandair?

Iceland Air is the flag carrier airline of Iceland and has a corporate head office in the city center of Reykjavik. It’s one of three Icelandic airlines: Play, Icelandair and Niceair, but it’s the biggest airline out of the three of them.

Does Iceland Air have free meals?

No, Iceland Air flights do not typically come with free meals, but you can purchase them from the air hostesses or pre-order them if you’d like to make sure that you have the meal that you want while you are flying.

Blue thermal pool at the Golden Circle in winter, with bright blue in the left and a patch of snow. There's a girl in a beige coat standing in the snow by the lake.

Is alcohol free on Icelandair?

Alcohol isn’t free on Iceland Air, but you can get free soft drinks like coca cola, lemonade, tea and coffee or purchase drinks like wine, gin, beer and vodka with mixers. You can also purchase snacks and even full meals.

Does Iceland Air give you a free checked bag?

Iceland Air gives you a free checked bag weighing up to 20 kilograms or 44 pounds. You can also take an overhead bag and a smaller bag for under the seat in front of you – the combined weight of these can be up to 10 kilograms or 22 pounds.

What are seats like on Iceland Air?

Iceland Air’s seats are fairly comfortable, there is plenty of legroom (even for the tallest passengers) and while the seats aren’t super comfortable, they aren’t really hard, especially because the journeys from the UK or East Coast USA are usually quite short.

Is Iceland air strict with baggage?

When I flew with Iceland Air, they weren’t checking anyone’s hand luggage, but the bag that I had wasn’t too big or too heavy. They may check if any bag looks suspiciously heavy, but they have more of an allowance than budget airlines.

Shops and restaurants lining the rainbow road of Reykjavik

Iceland Air review: is it worth doing?

Iceland Air vacations can be a great way to take the hassle out of organizing your Iceland trip.

Rates are usually a little cheaper if you book the components separately, but Iceland Air is a great airline and you have some more protection by booking a tour (but your travel insurance should cover this anyway).

It’s worth looking at both options and seeing just how much money you can save, looking at which option works best for you!

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