The Icelandic Civil Aviation Administration (ICAA) is a public institution under the Ministry of the Interior. The ICAA handles administration and oversight in the field of aviation in Iceland and in Icelandic territory. The Administration communicates with international organisations and civil aviation authorities in other states, and ensures that aviation safety and aviation security criteria meet international requirements and commitments as is stipulated in laws on the Administration, the Icelandic Aviation Act, and international agreements. The ICAA furthermore contributes to the progress of aviation in Iceland and conducts oversight of Icelandic air operators all over the world.
The Civil Aviation Administration (ICAA) is to operate according to the laws which specifically apply to it, as well as other laws which apply to the operations of public institutions, such as the Administrative Procedures Act, the Information Act, the Government Employees Act, and the Government Financial Reporting Act. These laws specify the main areas of the operation and place restrictions on it when needed.

To attend to its role, the operation mainly revolves around the following factors:
• Firstly, to grant all kinds of authorisations to ensure aviation safety. The ICAA issues licences for individuals, such as for pilots, air traffic controllers, and air mechanics. Furthermore, the ICAA issues airworthiness certificates, air operator certificates, and certificates for air navigation services and operations of aerodromes/landing strips, schools, maintenance organisations, etc. Aviation security programmes and use of airspace require the approval of the ICAA.
• Secondly, to follow the progress of aviation and conduct oversight of aviation, mainly with requirements for aviation safety and aviation security as a guiding principle. This consists, for example, in overseeing the airworthiness of aircraft, overseeing that flight operations and air navigation and aerodrome operations are correctly run, as well as ensuring that pilots and others involved in flight operations have the requisite rights and maintain those rights.
• Thirdly, to attend to general administration in aviation, communicate with foreign institutions, and look after the interests of Icelanders in every way. Communication with the International Civil Aviation Organisation (ICAO) is especially important as well as communication with institutions in Europe such as the European Aviation Safety Agency (EASA) as those institutions issue international standards and rules which serve as the basis for aviation operations all over the world.

The main goals of the Icelandic Civil Aviation Administration are to:
• Ensure that aviation safety in Icelandic territory and that of Icelandic air operators everywhere in the world will always be among the best in Europe.
• Ensure the recognition of Iceland in international aviation.
• Ensure the professional, safe, and prompt handling of authorisations.
• Ensure Icelandic air navigation services in the current control area.
• Ensure that the total cost of administration, authorisations is lower than in neighbouring countries.

Act no. 100 from 13 June 2006 makes provisions for the operations of the Icelandic Civil Aviation Administration.