In 1937, a new airline named Flugfelag Akureyrar was founded in northern Iceland. This was the beginning of Icelandair. Since the early days, cargo has played a significant role in its services and operations.
Both predeceasing companies of Icelandair - Loftleidir and Flugfelag Islands - carried cargo on their commercial passenger flights; their fleet was well-suited for combined passenger and cargo transportation. After founding Icelandair in 1973, a specialized cargo department was established.
In addition to offering belly space on Icelandair's flights, dedicated freighter flights on Boeing 737 started in 1997. As demand for the services grew, Boeing 757 freighters were added to the fleet in 1999.
Due to the increasing importance of the cargo operation within Icelandair, the subsidiary Icelandair Cargo was established at the end of 1999 to handle cargo operations solely.
Currently, Icelandair Cargo operates two Boeing 767 freighters and two Boeing 757 freighters.