Singapore and Iceland have concluded an Open Skies Agreement (OSA). Under the OSA, airlines from Singapore and Iceland have full flexibility to operate air services between and beyond both countries, as well as via intermediate points, without restrictions on capacity, frequency, and aircraft type.

The Singapore-Iceland OSA is also more liberal than conventional OSAs, as it allows for unlimited "hubbing rights," also known as "7th freedom traffic rights," for both passenger and cargo services. Singapore carriers may utilize these rights to base its aircraft in any point in Iceland and use the point as a hub for operations to third countries, without any restriction on destination, frequency, or capacity. The same applies to Iceland carriers.

The agreement was signed in Singapore by Mr. Lim Kim Choon, director-general and chief executive officer, Civil Aviation Authority of Singapore and Mr. Finnbogi Rutur Arnarson, charge d’Affairs, Embassy of Iceland in India (accredited to Singapore).

"This agreement is a reflection of the warm bilateral ties between Singapore and Iceland and underscores the commitment of both countries towards the liberalization of air services," said Mr Lim. He added, "Given the current economic downturn, it is even more imperative for governments to provide a liberal aviation framework for airlines to have full flexibility in capitalizing on market opportunities."