I go to Keflavik Iceland ALL the time for work for layovers. if you decide to visit KEF go to paddys i think tuesday nights or thursday nights they have a band and weekends are always packed.....great time. the blue lagoon is also about 20min. from there and its a must go to. I have flown iceland air a bit and its ok. nothing outstanding. Reyk. is also a great place, lots of shopping and restaurants and bars.
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