Icelandair said there had been a drop in demand for travel from Iceland following the country's recent economic difficulties. It also blamed the exchange rate between the Icelandic krona and the British pound. The decision mean the only direct flights between Glasgow and Reykjavik will be around New Year. Icelandair said it planned to re-introduce a twice-weekly service between the cities in spring 2009.
A spokesman for the firm said: "On that particular route, a large proportion of the passengers are from Iceland and heading to Scotland for Christmas shopping.
"The business has just dried up. People in Iceland have no confidence in their currency and its exchange rate, while they are also worried about things like job security.
"By the time March 26 comes we will be into the summer season for flights. If anyone has booked directly with Icelandair then they should contact us for a refund or alternative flight."