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Icelandair Now Eyes Higher Profits, $1.6 Billion 2024 Revenue

Icelandair’s 2024 Financial Outlook Shows Optimism After Overcoming Volcanic Activity Concerns

Icelandair looks ahead to higher profits after recent uneasy times caused by media reports of volcanic activity in Southwest Iceland. Its 2024 guidance shows strong signs of recovery, with financial growth gaining speed. The company revealed its optimistic results on February 1, 2024. The steadier booking environment stems from eased media-related worries. Also, settling private-sector wage disputes has sparked hope for the year.

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

Icelandair’s recent labor agreement conclusions suggest more economic stability. They strengthen Iceland’s role as a key player in the development and success of the tourism sector.

The year 2023 was significant for Icelandair. The airline ended its post-Covid recovery phase and started making a profit again. The focus now is on strategies to increase income and improve operational efficiency. Icelandair aims to keep an average profit margin of 8% before interest and taxes.

Ramping Up Capacity for Growth

Icelandair is set to expand its reach and increase revenue by adding 10% more available seat kilometers (ASK) over last year. The airline is choosing to expand and focus on highly profitable flights. The first quarter saw the biggest growth at 21%. The airline expects to grow by about 9% in the second and third quarters. Icelandair also plans a 6% increase in capacity for the fourth quarter.

Anticipated Financial Milestones

Icelandair anticipates a revenue of USD 1.6 billion for the full year of 2024. This expectation follows robust financial results and current booking trends in the first two months. The airline forecasts an EBIT margin of 2-4%, a promising sign for its profit margins. Icelandair also expects a higher net profit than last year, suggesting steady growth.

Confronting Early-Year Challenges

Icelandair faced challenges as 2024 started. Increased flights to profitable markets, including the UK, Frankfurt, and Amsterdam, pressured earnings per seat. News reports on volcanic activity in Southwest Iceland initially reduced new bookings. Despite expecting a slight dip in early 2024 profits compared to the previous year, the airline remains hopeful.

Icelandair plans to add more flights and expects to see its revenues rise. The airline aims for a profitable and stable 2024.

Iceland Is Back On Travel Map

Iceland remains a top choice for travelers, adapting well to changes in the tourism sector. Bookings for the summer look good, especially from those crossing the Atlantic. The Icelandic tourism market stands strong, showing the country’s lasting appeal.

Demand for Iceland has dipped slightly from last year’s peak, but its charm persists. Other destinations now compete for tourists, and the initial post-pandemic travel rush has calmed. Yet, Icelandair responds with resilience, adjusting flight capacity to stay profitable.

Volcanic activity in Southwest Iceland made some headlines and caused a dip in early-year bookings. But it’s these natural events that make Iceland so intriguing to many.

Looking ahead, Iceland has great potential to remain a leading travel destination. Its stunning nature, well-developed infrastructure, and stable economy promise a flourishing tourism sector that awaits global explorers.

Icelandair Full-Year Guidance 2024:

   Operating income USDbn Total year ~1.6 
   EBIT % Total year 2-4% 
   Net capex USDm Total year ~130-140 
   Capacity chg. (ASK) Total year ~10% 
   Av. Fuel price m/t USD Q2-Q4 840 
   Av. Weighted hedged fuel price m/t USD Total year 833 
   Hedged % of est. fuel usage (tons) Total year 45% 
   Av. EUA per unit EUR Q2-Q4 65 
   Av. USD/ISK Q2-Q4 138 

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