Daily Tedium

Iceland’s Latest And Greatest

One of the greatest business stories in Iceland’s long history, along with the current craze that’s got Icelanders shopping like crazy.

By Ernie Smith

Iceland is one of my favorite countries. Always has been, always will be, and not because I’m a Björk-head, really. Really, I think it’s because of its beautiful simplicity, relatively isolated location, and ease of travel from the United States. (It’s certainly not because of the fermented shark.)

So it warmed my heart that over the weekend, I ran into not one, but two fascinating stories about Iceland and the outside world—one from the distant past, and the other from the present day.

Fast Company was nice enough to write about the first—the tale of Alfred Eliasson, the founder of Loftleiðir or Icelandic Airlines, the airline that later became known (after a merger) as Icelandair. Eliasson’s company had been approved for international flights, but was struggling financially and was close to shutting down. But a fateful airplane crash into a glacier ended up turning into a surprising opportunity to revive the company. The U.S. Air Force worked to save crew members on the downed flight, only to find that the air force’s own DC-3 cargo plane was unable to travel due to the weather.

Eliasson bought the DC-3 aircraft, which was covered in snow in a glacier, for $600, and had the company’s crew members recover the plane, then conducted significant repairs on it. By sheer chance, the Spanish airline Iberia wanted the retrofitted plane (which saw action in Japan during World War II), and paid IcelandAir $75,000. That was enough to get the airline moving again—at which point the company came up with the international flight strategy for which it is known today, offering cheap international flights into Europe by getting around regulations of the era. Friggin’ brilliant—and there’s a documentary on it, of course.

The other story involves a company from the U.S. getting in on the Icelandic market—that company being Costco, the membership-based retailer with the huge fanbase. Iceland is not a country known for its chains—infamously, McDonald’s exited the Icelandic market during its financial crisis in 2009, and someone decided to save a burger from that time.

But the bad vibes associated with those McDonald’s locations haven’t affected Costco’s new location in the Reykjavík municipality of Garðabær. In fact, people are stunned by the prices they can get at the wholesale store—with cheap gasoline and low-priced television sets working the locals into a bit of a frenzy.

“If we need to lower prices to do that, we will,” Brett Vig­elskas, the managing director of Costco Iceland, told Iceland Monitor. “People pay for membership to the store so they expect the lowest prices.”

Vig­elskas added that tens of thousands of Icelanders have visited the store over the past few days, which is impressive given Iceland’s population of approximately 330,000.

It’s quite strange to think about Icelanders going crazy over a warehouse-style store, but it’s equally crazy that the country’s largest airline was built on the back of an airplane dug out of a glacier. On the grand scale, we’ll give ‘em this frenzy.

Ernie Smith

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Ernie Smith is the editor of Tedium, and an active internet snarker. Between his many internet side projects, he finds time to hang out with his wife Cat, who's funnier than he is.

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