The new K64 masterplan will deliver a historic legacy for Keflavík International Airport, the local region and Iceland itself, enhancing the country’s reputation as a strategic location between Europe and the USA
Located 50km from capital city Reykjavik, Keflavík International is the largest airport in Iceland and functions as the gateway to the country. Its passenger numbers rose by 20-30% every year between 2015 and 2019; last year they reached 6 million and are expected to rise to 7.8 million in 2023.
Back in 2015, the airport’s operator, Isavia, introduced a 25-year masterplan developed to ensure responsible decision making throughout each stage of development at Keflavík, and published an updated and reviewed version in March 2023. The planned work was set out as phases, with the scope of each stage determined by factors such as the number of passengers and their needs.
“Much of the planned work relates to anticipated growth, and a phased approach means we can continue to have a fully operational airport during and after each project,” says Brynjar Vatnsdal, manager of airport planning and development at Isavia.
“Since 2015 we’ve seen incredible ups and downs. Traffic went through the roof – it grew much faster than anticipated. Then we saw the other extreme with Covid. If this taught us anything, it’s that by doing things in phases we can slow down development if growth decelerates,” he adds.
The masterplan evolution
The original masterplan looked at all aspects of the airport – from the airfield to the terminal – and included a “pretty big airport city”, according to Vatnsdal. However, this has evolved in the 2023 updated masterplan, partly due to the launch of the K64 project in March.
Until now, the airport has mainly functioned as part of the country’s infrastructure, but the new K64 masterplan outlines the enormous potential to use the wider airport area – Suðurnes – as a bigger economic driver for the region and even potentially the country as a whole.
Three years in the making, the K64 masterplan was developed by Isavia and the Reykjanesbær and Suðurnesjabær municipalities. Designed as an integrated masterplan that combines transportation, energy, and industrial, commercial and social planning, it aims to diversify the local economy into high-value sectors supported by new living and cultural spaces.
“This is an extremely strategic location between the US and Europe, which was why the US military originally built an airport here in the 1940s,” notes Pálmi Freyr Randversson, managing director of the Kadeco airport development company, which is overseeing K64. “This is how we came up with the masterplan’s name. The K refers to the airport and development company, while 64 is Suðurnes’ degree of latitude.”
The K64 masterplan focuses on the development of four distinct areas: an ecological industrial park, an airport visitor plaza and business center, an R&D hub and a new residential area. Different aspects of the project will move forward at different timescales, but Kadeco has estimated that a minimum of €1bn (US$1.1bn) will be spent on the development of 400,000m2 of land between now and 2050.
“We have a timescale for the mobilization of projects, then a 2035 vision of which projects could be started by then, and another picture for 2050,” says Randversson. “These things take time, though, and right now we’re looking at further planning, tenders and impact and environmental assessments.”
A green industry hub
Steps have already been taken to turn the Helguvik-Bergvik harbor site into an ecological industrial park, transforming abandoned factories into something much greener. “There’s a lot of underutilized land there and we’re going to reuse these old factories. Work has already begun to repurpose a 27,000m2 aluminum smelter building into a site that welcomes companies working on eco-friendly projects,” explains Randversson. “What we want is to put this site on the map as a place green companies can come and work, located just five minutes from an airport and three minutes from a harbor. It’s going to be really interesting to see how that goes.”
New homes for a new community
Over at the former US naval base, there are plans to redevelop the area into a residential district, sheltered from Keflavík International by land that was once used as the old military airport’s apron. “We’d like to reinvent that site, which is largely vacant at the moment, to shelter the residential area from the airport itself – both aesthetically and acoustically,” Randversson explains.
Housing, schools, healthcare and leisure facilities will be created here, helping to bring more people to the area and retain them. Furthermore, with the development of new business hubs, Kadeco expects to see major environmental benefits as fewer people will travel into the capital region for work and pleasure. Randversson expects development to start within a year, and he’ll be able to keep an eye on progress because the old naval base is also the site of Kadeco’s K64 HQ.
The future of aviation
Focusing on the heart of K64 – the airport – the location of the planned R&D hub is particularly strategic for aviation-related projects as well as developing, testing and implementing circular economy technologies.
“It will definitely focus on the future of aviation, and we’ll be able to build hangars that provide both air- and landside access. We already have an aviation academy nearby, and based on our access to clean energy, it could be extremely interesting to dig deep into the future of aviation fuel. Iceland could be the center point for those kinds of studies,” Randversson enthuses.
“If the development of sustainable aviation fuel turns out well, then latitude 64 will become extremely strategic again, in the sense that long-haul flights between Europe and the US may need to land here to refuel. That’s one of the opportunities we’re seeing,” he explains.
Then there’s the proposed landside forecourt development to the north of the airport terminal, which K64 will develop in close collaboration with Isavia. This will feature hotels and facilities for airport-related services including but not limited to a commercial zone, visitor center, events spaces, co-working areas and a bus terminal.
“This is probably the lowest-hanging fruit,” says Randversson. “There’s currently one hotel, no parking structures, offices or the like. Isavia already had some big plans for this area as part of its own masterplan, but the organization has simply not been able to find the internal capacity to move ahead, and so we’ve taken these on so that the operator can focus on operations.
“We’re going to look at getting passengers out of the airport and supporting more landside alternative revenue streams,” he continues. “There are a lot of hotel development companies already showing an interest, but that’s just one part of what we could do here.
“For example, half of the tourists that visit Iceland hire cars, and right now rental companies are spread about, so we’re looking at how we can improve on this by creating a coordinated car rental terminal outside the airport.”
Nature is also a key component of the masterplan, which includes the development of a peninsular park that starts close to the airport forecourt and offers a network of walking paths and bike trails. These will not only provide more pleasant commutes for workers and residents but also enable transfer passengers to get out of the terminal and back to nature between flights, with maps, bike rental and luggage storage available right outside the terminal.
A focus on core operations
The K64 masterplan has enabled Vatnsdal and his team to update their airport masterplan to focus entirely on the development of the airport’s core operations. “It’s helped us to focus on the development of the terminal and airfields,” he says. “We’re also looking into the supporting functions that are directly related to airport operations – cargo, landside commercial offer, maintenance of aircraft services and the like.”
Keflavík is unusual in that it relies heavily on transit traffic (approximately 40% of the total) and it is a popular transiting hub between Europe and the US. To meet demand, Isavia knew the airport needed to add capacity and remove any bottlenecks.
“Our biggest customers, the local carriers, are hub carriers, and they depend on getting their fleets in and out quickly. We need to offer quick turnaround times and make it fast and easy for passengers to transfer between any gate, and therefore need to add capacity during our busiest hours to better manage traffic,” explains Vatnsdal.
Key features of the original masterplan were the development of the east and west piers, a new north terminal and a third runway. These are still at the core of the revised plan, which now also includes a diamond gate area, a north and south terminal connecting building and airfield improvements.
The project is divided into two main phases. The first is based on the capacity of Keflavík’s two current runways and current capacity for up to 12.9 million people. Several aspects are currently in design, being built or already in use, with Keflavík’s new east wing building under construction and expected to be fully operational next year. This will be the connection to the future east pier.
“The east wing building will have a new commercial area and reclaim belts, and we expect the basement and first floor to enter operation in June 2023. The second and third floors will be operational by next summer,” explains Vatnsdal.
Next in line is construction of the new connection between the north and south terminals, currently in stage three design. “Building this connection is essentially open-heart surgery on the airport – it’s right in the middle of where everything happens, so it’s a huge challenge for us,” Vatnsdal says.
“The terminal connection building will host the centralized functions we need in order to be able to grow further to the east, with a centralized immigration area and extended commercial area, so we can begin work on the stands for the east pier.”
Phase 2, which isn’t expected until after 2035, will involve the construction of a third runway to mirror the pier to the west, which will increase capacity to the 15.1 million passengers forecast by 2045.