Business: A Lost Pioneer

Black clouds for Icelandair

In the days before Freddie Laker and price warfare brought down the cost of air travel across the Atlantic, tiny Icelandic Airlines was the favorite of backpacking students and budget-minded businessmen. Americans going to Europe did not mind if flights often had long layovers at the windswept airport in Reykjavik, Iceland, or if they landed only in backwater Luxembourg. Since Icelandic was not a member of the fare-setting International Air Transport Association, the "hippie airline," as it was nicknamed, hopped the Atlantic for as much as $153 less than...