Friday, 7 February 2020

Icelandair reports an improved performance during the last quarter of 2019

Icelandair has released details of its performance during the last quarter of last year which showed total revenue was up by 7% to $319.2 million. The airline says that 25% more passengers travelled to Iceland with Icelandair in 2019 compared to 2018.

Other key facts:

EBIT improved by USD 32.6 million from Q4 2018, amounting to USD -36.7 million
Net loss in 2019 amounted to USD 57.8 million compared to net loss of USD 55.6 million in 2018
Unprecedented impact of the MAX suspension primary reason for negative results
Equity amounted to USD 482.5 million at the end of the year.  Equity ratio was 29%, up from 28% at the beginning of the year based on the same accounting principles. Excluding the impact of IFRS 16, the equity ratio would be 36%
Total liquidity USD 301.6 million at the end of 2019
The estimated net negative effect quantified to date of the MAX suspension in 2019, is around USD 100 million at EBIT level
Focus on profitability and MAX risk mitigation in 2020

Bogi Nils Bogason, President and CEO: “The results for the fourth quarter are in line with management's expectations and the Company's financial guidance. We improved our performance with the rationalisation of our route network, improved revenue management, better utilisation of crew and reduced disruption costs by improving on-time performance.

The year 2019 was challenging, as the suspension of the MAX aircraft had an unprecedented negative impact on Icelandair‘s operations, resulting in lost revenue, increased expenses and restricted utilisation of the Company’s fleet and crew. However, with our focus on improving our operations during the year and increasing the profitability of our route network, considerable operational improvements were achieved in the Company’s underlying business. In addition, the flexibility and strength of our route network was clearly demonstrated when we were successful in adapting quickly to changes in the market by realigning the network and increasing the number of passengers to Iceland by 25% in 2019, despite the MAX suspension. This allowed the Company to meet increased demand and ensure seat capacity to and from Iceland and thereby support the Icelandic tourist market.

We further strengthened the liquidity of the Company through successful refinancing. Additional equity was issued when a new shareholder, Par Capital, joined the shareholders’ group, becoming the single largest shareholder of the Company.

I believe that with clear strategy, flexible route network, strong financial position and outstanding employees, we are well-positioned to achieve our key goal of returning to profitability in 2020 and building a platform for sustainable, profitable growth for the future.”

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