The airline was established in 2004 and started operations on 1 October 2004, taking over the domestic operations of Islandsflug. The owners of City Star Airlines, a ticket sales office based in Aberdeen, Scotland, acquired the controlling shares of the airline in 2005 in order to acquire JAR OPS 1 licensed operator for its expanding Aberdeen operation. Landsflug had 80 employees (at March 2007). In 2008, the company was disestablished.
Landsflug operated scheduled services to the following destinations: Vestmannaeyjar, Höfn, Sauðárkrókur, Bíldudalur and Gjögur. Landsflug was also contracted by the Icelandic government to operate medical emergency flights.
As of March 2007 the Landsflug fleet included:
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