Municipalities in East Iceland are preparing a joint challenge to changes in the Loftbrú flight subsidy, warning that replacing its percentage discount with a fixed payment will increase costs for travellers in the region, Iceland Review reports.
Under the announced arrangement, Loftbrú’s 40% discount will be replaced from January 1 by a subsidy of ISK 7,000 for each eligible flight leg. Eligible residents will continue to receive support for six one-way flights annually.
Ragnar Sigurðsson, chair of the Association of Municipalities in East Iceland, told RÚV that regional associations and municipalities were preparing a joint letter to Parliament’s Budget Committee. He estimated that the change would increase the average amount paid by travellers on East Iceland routes by approximately 25–30%.
The government announced the arrangement on Friday, saying a fixed payment would make expenditure more predictable. Ragnar disputed the suggestion that residents could avoid a reduction in support by booking cheaper tickets earlier. He said fares below ISK 17,500 were rarely available on East Iceland routes.
He also stressed the purpose of many journeys, saying residents frequently use the programme to reach specialist and essential services in the capital region. That makes the level of support relevant to travel for services as well as other trips.
According to government figures cited in the report, approximately 62,000 residents qualify for Loftbrú, and about 80,000 subsidised journeys were taken in 2025. The programme has an annual budget of ISK 600 million.
The planned joint request will ask the government to reconsider the measure, bringing East Iceland municipalities’ concerns about passenger costs before Parliament’s Budget Committee.
