I travelled on Iceland Air from Minneapolis to Reyjavik to London in mid-july 2008. I expected Iceland air to be a budget airline as the ticket prices offered were cheapest on the route. Despite the good prices I do not recommend travelling on this airline.
Staff at check-in counter was not very friendly and was trying to show off their high standards (which didnt make any logical sense). Here is what happenned.. we were checking in 5 suitcases, 4 of them weighed 1 pound less than the limit and 1 of them was 1 pound over the limit.
Check in staff insisted we repack our bags and make each of them weigh under limit. In my experience all other airlines have ignored such minor difference as the overall weight was under permissible limit and the extra weight was also very less. Anyways, we did the repacking and they waited on us, wasting everyones time and causing unnecessary hastle.
Another interesting thing they did was weigh everyones handbags. If you are planning to carry any wheeled cabin bags on this airline, please dont as those bags may be over the allowed by themselves as the allowed limit is very less (6kg).
After getting to the boarding gate, they announced flight was delayed by 1 hr. After getting onto the flight, we thought rest of the flight should be ok now. It was time for dinner, we had requested Hindu meal. One would think they will serve meal appropriate for any Hindu, so were expecting a vegetarian meal. To the contrary, they served chicken. Obviously anyone who seriously follows Hindu religion, like a brahmin will find the meal unacceptable. so we had to refuse their meal and manage with couple of fruits.
Seating space and amenities in the aircraft are not at par with aircrafts of International flights flown by other airlines. The planes are very old and are like the ones used for domestic flights.