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Icelandair announces Q1 financial results: Revenue increase of 11%, total income USD 259.0 million

Icelandair

While the volcanic eruptions in Southwest Iceland have slightly decreased demand to Iceland, Icelandair leveraged the flexibility of its network to adapt to market developments and focused on the via Iceland market which explains the increase in the number of connecting passengers.

Icelandair announced its Q1 2024 financial results, with a total income of USD 259m. – an 11% increase in revenue coupled with an increase in the number of connecting passengers by 48%.

Financial results Q1 2024
  • Revenue increase of 11%, total income USD 259.0 million
  • Record passenger revenue USD 199.0 million up by 17% from last year
  • 5% decrease in unit cost
  • Fleet renewal and focus on operational efficiencies contributed to the decrease in unit cost
  • EBIT result negative by USD 68.9 million, compared to USD 61.6 million last year with the
  • decrease mostly driven by seismic activity in Southwest Iceland, especially in January
  • Positive turnaround in the Cargo operation of USD 3.8 million
  • Capacity increased by 21% in the passenger network, with focus on profitable markets
  • Number of passengers 757 thousand up by 14%
  • Number of passengers to Iceland 284 thousand
  • Strong liquidity position of USD 411 million at the end of Q1 2024

Bogi Nils Bogason, President & CEO, says “The results of the first quarter were in line with our expectations with performance in January colored by the impact of global media coverage of the volcanic activity in Southwest Iceland. We leveraged the flexibility of our network to adapt to market developments, compensating for the slight decrease in demand to Iceland by focusing on the market via Iceland and thereby increasing the number of connecting passengers by 48%. 

Strong revenue generation resulted in record passenger revenue in the first quarter. Although capacity increase in mature markets put pressure on yields and load factor, the focus of the capacity increase in our network was however first and foremost on markets that contribute to strong revenue generation and profitability. We achieved a 5% decrease in unit cost where a higher proportion of efficient aircraft in our fleet, economies of scale and improved operational efficiencies contributed to the decrease. Our on-time performance was outstanding in the quarter, which is also a key factor in reducing cost and increasing customer satisfaction. 

We have achieved a great turnaround in our Cargo operation that turned operating profit in the quarter with outlook being good for the year. Our Leasing operation continued to perform well, driving important revenue and profitability for the Company and reducing seasonality with improved utilization of our fleet and crew. 

The year 2023 marked the final year of Icelandair’s post-covid recovery and a return to profitability. Now, the focus is on actions that will improve operational efficiencies, reduce costs, and further strengthen revenue generation. We have already taken various actions, such as simplifying our organization, whereby the number of management positions was reduced, and outsourcing our flight catering business, which is one of the largest food production companies in Iceland with around 200 full-time employees. Further initiatives to drive efficiencies are underway. 

With this focus, we expect increased net profit for the full year and are confident that we are on the right track to reach our long-term goals. I would like to thank our employees for their great work in preparation for the coming high season and our customers for choosing Icelandair. We look forward to the exciting journeys ahead.

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