I recently had to take a trip to Iceland, and found the experience of flying with Air Iceland to be so outstanding that I had to come and sing their praises. I've flown business and economy class with a range of airlines, including many of the big names, but few were this good. Of course this airline flys from Heathrow to Iceland, but it also has trans-Atlantic flights, which stop off at Greenland. The airline has a fleet of Boeing aircraft. The plane I flew out on was very clean, and the business class seats had plenty of leg room. In flight entertainment consists of the usual music channels, and a tv /film show. The things which really made this airline stand out from the rest though were the crew, the food, and the timekeeping. The crew were genuinely courteous and helpful, without being patronising. They were extremely well presented, and it was refreshing to see stewardesses without the seemingly obligatory inch thick makeup. The food was spot on. I usually detest airline food, but the catering on both outbound and inbound flights (dinner and breakfast respectively), was fresh and appetizing. There were 3 choices of menus, one of which was a 'healthy option'. There were also plenty of opportunities to top up with complementary drinks throughout the meal and flight. The timekeeping was excellent, in fact the return flight landed 20 minutes early. Of course I appreciate that a lot of external factors have an effect on airline punctuality - heavy air traffic, weather, and weight of traffic at busy airports for instance. If you can believe the sales brochure, Air Iceland is one of the few airlines to have improved its punctuality in the face of these adversities. One little special touch which I have to mention, during the Millenium year (which holds extra signifigance for Iceland, as they celebrate their own 1000 years of Christianity), all the ice served on board is from one of Iceland's glaciers.
The flight duration from Heathrow to Keflavik is approx 3 hours. There are scheduled transfer buses from Keflavik to Reyjavik, which is about 40Km away. These stop at all the main hotels. Admittedly, if you're flying from the UK to Iceland, you don't really have a choice of airline, but I'm sure your experience of Air Iceland will be every bit as enjoyable as mine.