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Icelandair Posts $11m Profits in 2023, Remarkable Turnaround

Despite Seismic Activity Impact, Icelandair Triumphs with Strong Financial Results in 2023

Icelandair has successfully navigated through turbulent skies to report a profit of USD 11 million for 2023. This marks a dramatic recovery from a USD 6 million loss in the previous year, showcasing the airline’s resiliency and adaptability.

Icelandair Places First-Ever Airbus order of 13 A321XLRs
Icelandair Places First-Ever Airbus Order of 13 A321XLRs

Icelandair Record High Revenues

The airline’s financial comeback can be attributed to its exceptional revenue performance, achieving record high unit revenues. Additionally, Icelandair’s customer base expanded significantly, with the carrier serving 4.3 million passengers, a substantial 17% increase from the prior year.

Further highlighting Icelandair’s operational efficiency is an improved load factor — the average number of seats filled per flight — which reached 81.5%, an increase of nearly two percentage points.

Despite facing challenges such as a volcanic eruption, increased seismic activity in Southwest Iceland, and labor strikes by air traffic controllers in the fourth quarter (Q4), the airline’s full-year results remained robust. Although these events affected the Q4 earnings, with a USD 50.3 million negative EBIT (Earnings Before Interest and Taxes), Icelandair’s overall yearly performance was solid.

Regarding operational growth, the final quarter saw a 13% rise in capacity and a 12% increase in the number of passengers compared to the same period in the prior year.

Icelandair reported a strong financial cushion to cap off the year, with a liquidity position of USD 323 million. This financial strength positions Icelandair well for sustainable growth and potential future challenges.

Icelandair’s 2023 financial results reflect a company with a sound strategy, operational excellence, and a customer-first approach.

Comments from Bogi Nils Bogason, Icelandair President and CEO on Icelandair Profits

“It is an important milestone to turn a profit after taxes in 2023 following many challenging years. Revenue generation was very strong during the year, with strong demand in all our markets, especially from North America to Iceland. In addition, we achieved the best on-time performance for years, with Icelandair being named one of the top 10 most punctual airlines in Europe in 2023.”

Impact of Seismic Activity

“Our core business performed well in 2023, especially in light of the impacts of external challenges and negative results in the cargo operation that we have already acted on. Following one of the strongest third quarters in our history, the fourth quarter started off well. However, when the seismic activity in Southwest Iceland started in November with the consequent global media coverage, demand weakened and, thereby, revenue generation was negatively affected. In addition, the impact of labor actions by air traffic controllers in Iceland and a volcanic eruption in December was significant. Furthermore, the capacity increase seen in key markets inevitably puts pressure on unit revenue.

“The results in the fourth quarter were, therefore, below expectations and impacted the full-year results. There are exciting times ahead, although the first part of the year will be challenging due to the aforementioned impacts that will continue into the first quarter.”

Set to Meet Challenges Ahead

“We are in a good position to respond to the challenges and seize the opportunities ahead with our flexibility to adapt to the situation at any given time. Aviation and tourism are very important industries for the Icelandic economy and society. The tax footprint of Icelandair was USD 401 million in 2023 and tourism accounts for a significant proportion of Iceland’s export revenue. It is therefore key to ensure the competitiveness of these industries into the future.

“An important part of that is to reach an effective solution on the collective bargaining agreements that are currently being negotiated in Iceland and the successful easing of inflationary pressures in the country.”

Positive Outlook for 2024

“The outlook for the summer is good. The demand for travel to Iceland is recovering following last weeks’ events, with Iceland continuing to be a popular destination. We are also seeing a higher proportion of bookings on the via market than before. Our flight schedule in 2024 will be around 11% larger than in 2023 with 57 destinations, thereof three new – Pittsburgh, Halifax and the Faroe Islands.

“I look forward to our endeavors in 2024 with our outstanding team of employees and I would like to thank them for their incredible resilience and great work during challenging times in 2023. I would also like to thank our partners, shareholders and last but not least our customers for choosing Icelandair.“

Icelandair 2023 Results Presentation

Icelandair 2023 Financial Results


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