There are many occasions when the Airlines cancel flights, for instance, it can be due to bad weather conditions, technical issues on the plane, insufficient staff, etc. In case the Icelandair cancelled flights the travelers are given the option to either take the next available flight or cancel their tickets. The refund claim depends upon the reason for flight cancellation. If the airline is responsible for cancelling a flight it has to pay compensation to its passenger but for reasons beyond the reach of the airlines, it may only compensate for extra expenses which occurred because of the flight cancellation.