Icelandair: cash refund, voucher or rerouting — choosing correctly
After a cancellation, Icelandair will put an option in front of you, and the temptation is to just take it. But underneath that offer usually sit three genuinely distinct paths, and grabbing the wrong one for your situation can quietly cost you real value. Knowing all three before you respond puts you in control rather than the airline.
Free eligibility check
Check your case in the form
Enter your route, date and type of disruption. We will check whether your case qualifies for a claim under EU 261/2004 or UK261.
What happened to your flight?
Claim up to €600 for a delayed or cancelled flight.
Choose the situation that applies to your flight:
Cash refund: the strongest option, and the default
Getting the unused portion of your ticket back in cash is your baseline right once a cancellation qualifies. Icelandair has seven days from your request to pay it, and it has to come as actual cash, a bank transfer, or a cheque — a travel voucher is only acceptable if you specifically say yes to it. Icelandair isn't allowed to hand you a voucher as the automatic substitute.
A voucher only works if you actually agree to it
There's nothing wrong with a voucher if you're confident you'll be flying Icelandair again soon and the terms attached are genuinely decent — but it's never something the airline can simply impose on you. If one shows up on your account without you having chosen it, you're entitled to ask for it to be swapped back for cash.
Rerouting stands entirely on its own as a third path
Being flown to your destination — whether immediately or on a later date that suits you better — is a completely separate choice from either a refund or a voucher. Neither better nor worse inherently, it comes down to whether your destination is still actually where you need to be, or whether the disruption has made the whole trip pointless anyway.
Why this decision is worth thinking through
Grabbing a hasty rerouting through Keflavík onto a mediocre connection, purely because it was the first thing offered, can leave you in a worse spot than pausing to request a refund and sorting your own onward plans instead. On the flip side, turning down a genuinely workable rerouting out of sheer frustration, when getting there is still what actually matters to you, isn't necessarily the smarter move either. Think about your own circumstances rather than defaulting to whatever's put in front of you first.
Stuck with a voucher you didn't want?
Get in touch with Icelandair, say clearly that cash is what you'd prefer, and point to your right to choose a refund over a voucher unless you knowingly consented to the voucher specifically. Plenty of automatically-applied vouchers can still be flipped back to cash if you raise it promptly and make yourself clear.
Does any of this touch a separate compensation claim?
Not at all. This choice is purely about what happens to the value of your original ticket. Any fixed compensation owed for the cancellation itself — based on notice and cause — is worked out completely independently and doesn't change no matter which of these three you pick.
A worked example
Icelandair cancels a flight and automatically loads the value onto the passenger's account as a travel voucher, without first checking what they'd prefer. The passenger, who has no plans to fly Icelandair again anytime soon, contacts customer service, points to the statutory right to choose, and asks for the amount in cash instead. Icelandair processes the switch, and separately, the passenger still goes after fixed compensation for the underlying cancellation, a claim entirely untouched by which of the three ticket-value options they ended up choosing.
FAQ
Can Icelandair just hand me a voucher instead of cash without checking first?
No — that requires your explicit agreement. You're entitled to ask for cash instead.
Is accepting a rerouting always the smart move after a cancellation?
Not necessarily. It hinges on whether your destination is still genuinely where you need to end up, versus a refund making more sense if the trip's purpose has already fallen apart.
How quickly does a cash refund arrive once I ask for one?
Generally within seven days of the request, under the applicable rules.
Can I still switch an accepted voucher back to cash?
Often, yes — particularly if you never actively chose the voucher to begin with. Reach out to Icelandair promptly to request the switch.
Does picking a refund over rerouting change my separate compensation claim?
No, the two are assessed completely independently of each other.
If part of your trip was already completed
Had you already flown part of your itinerary before a later leg got cancelled, the refund covers just the unused remainder, and you can also ask for transport back to where you originally started if you'd rather not continue the trip at all.
Does your fare type change any of this?
No. Whether you paid for a bargain promotional fare or a fully flexible ticket, the exact same three-way choice applies once a qualifying cancellation happens, based simply on what you actually paid.
A note on partial rerouting offers
Occasionally Icelandair offers a rerouting that only covers part of your original itinerary, leaving you to fill in a gap yourself. Treat this as materially different from a genuine full rerouting, and weigh a cash refund against it carefully, since a partial offer isn't worth the same as actually reaching your final destination as originally booked.
Don't let the path of least resistance decide for you
Whatever arrives first, or takes the least effort to accept, isn't automatically the option that actually serves you best. Take a beat to genuinely weigh all three against your real situation before locking in a choice that might be hard to walk back later.
Booked through a travel agent or third-party platform?
The choice between refund, voucher and rerouting remains yours even when a third party handled the original booking. In practice, a refund on a third-party booking sometimes needs to route through that platform rather than coming straight from Icelandair, which can add some time, but the underlying entitlement itself doesn't change.
A decision made under pressure at the gate
Staff sometimes present this choice verbally in the middle of a busy disruption and expect a quick answer. If you're not confident which option genuinely fits your situation, it's reasonable to ask for a written note of what was offered and confirm your decision by email shortly afterward, rather than being rushed into something you haven't had time to weigh properly.