Icelandair: Building a segmentation that keeps working

How TVE created a consumer segmentation that has helped Icelandair prioritise its most valuable travellers, inform decisions across the business and navigate seven years of change in the travel market.

The challenge: Who should Icelandair focus on for growth?

Travel is universal, but people don’t all travel or think about travel in the same way.

And the most important differences aren’t necessarily defined by age, gender or where someone lives. They’re often rooted in more fundamental attitudes and motivations: how far ahead they plan, what they value when they fly, how they choose a fare, or whether they see the journey itself as part of the whole travel experience.

Icelandair needed a better way to understand these differences and, crucially, to identify which travellers represented the greatest opportunity for the brand so they could bridge the gap between brand and performance marketing.

The answer needed to go beyond describing customers. It had to give the business a clear framework for deciding who to prioritise and where to focus for growth.

Our approach: A segmentation built around the decisions Icelandair needed to make

In 2019, TVE created a bespoke transatlantic traveller segmentation for Icelandair, initially drawing on data from more than 13,700 transatlantic flyers.

Rather than relying on demographics alone, the segmentation groups travellers according to meaningful differences in their attitudes, motivations and approach to flying and travel.

But identifying different types of traveller was only part of the job.

We built Icelandair’s strategic priorities and commercial goals into the segmentation from the outset bringing together the needs of internal stakeholders but also partner

agencies (e.g. paid media and PR), allowing us to identify not just recognisable groups of travellers, but the segments that mattered most to the business.

To determine where Icelandair should focus, we considered factors including travel spend & headroom, frequency, cabin preference, business versus leisure travel, brand preference and proposition fit.

The result was a clear view of who Icelandair should prioritise, and why.

From customer understanding to business decision-making

A useful segmentation shouldn’t live in a presentation deck.

Over seven years of working together, the Icelandair segmentation has become a lens for decision-making across different areas of the business, informing thinking around:

• Customer experience
• Cabin layout and fare families
• Marketing and creative development
• PR
• Paid media
• longer-term changes in traveller attitudes and behaviour

Rather than starting each new strategic question with a blank sheet of paper, teams have a shared understanding of the customers Icelandair wants to win and what matters to them.

In a complex category, that makes prioritisation much simpler.

Turning segmentation into more effective marketing

The segmentation has also given Icelandair and its agency partners much clearer target audiences for campaign and creative development.

Icelandair’s performance marketing agency found that tailoring activity to the segment profiles increased click-through rates. We subsequently worked with the team to test creative options and messaging variation across different segments, exploring which messaging and imagery resonated and even which Icelandic landscapes and experiences appealed most strongly to different traveller segments.

The segmentation therefore moved beyond identifying an audience. It helped the team understand how to communicate with that audience more effectively.

Keeping the segmentation alive

The travel market of 2026 looks very different from the one Icelandair was operating in when we first created the segmentation in 2019.

Rather than treating the original work as a one-off exercise, we’ve revisited and evolved it throughout our seven-year relationship with Icelandair adding layers of understanding over time.

Regular check-ins have allowed us to see how the segments themselves are changing and how wider trends are reshaping attitudes to travel, from booking behaviour and the value people place on the travel experience to changing attitudes towards sustainability.

This has turned the segmentation into something more than a snapshot of Icelandair’s customers. It has become a barometer for change in the category, helping identify emerging opportunities and giving the business a consistent framework through which to understand them.

Bringing the customer into the room

Of course, a segmentation only works if people understand and use it.

Alongside the strategic framework, we’ve created rich segment profiles and videos featuring real travellers from across transatlantic markets, making the segments recognisable and memorable for teams across the organisation.

That shared language helps remove wasted effort. Teams don’t have to debate from scratch who the priority customer is every time a decision needs to be made. They have a common view of who they’re trying to reach, what matters to them and why they’re important to Icelandair.

The impact

Seven years after it was first created, Icelandair’s segmentation continues to help the business:

Prioritise for growth

Identify the traveller segments with the strongest combination of commercial value and fit with the Icelandair brand and proposition.

Make better decisions

Bring a consistent customer lens to questions spanning product, customer experience, fares and marketing.

Improve marketing effectiveness

Give internal teams and agency partners clearer audiences around which to develop and optimise communications.

Spot emerging opportunities

Track changing attitudes and behaviours to understand where the travel market is moving.

Align the organisation

Give teams a shared, tangible understanding of the customers Icelandair wants to win.

The TVE view

The Icelandair story demonstrates what we believe good segmentation should do.

It shouldn’t simply divide a market into interesting groups of people. It should be seen as a proprietary asset with tangible value, helping a business decide where to focus, what to prioritise and how to act.

And it shouldn’t be treated as a one-off research exercise. The best segmentations become living strategic frameworks, evolving alongside customers, categories and the decisions a business needs to make.

That’s when segmentation becomes a tool for growth.