Thursday, 23 July 2020

Icelandair's preliminary results for Q2 2020

In the second quarter of 2020, Icelandair Group‘s operations were significantly affected by the Coronavirus COVID-19 pandemic and the associated wide-ranging travel bans and a decrease in global travel demand.  As such, the firms preliminary results of the second quarter of 2020 indicate that revenues decreased by around 85% between years to around USD 60 million and EBIT amounted to loss of USD 100-110 million. Cash and cash equivalents amounted to USD 154 million at the end of the second quarter. 

The Group took swift actions at the beginning of the pandemic to minimize operational expenses and cash outflow and continues to monitor these closely.  As previously announced, Icelandair Group is in the final stages of key stakeholder negotiations to be in a position to initiate the new share offering and complete a voluntary financial restructuring of the Company.  It is expected that fully documented agreements will be completed with the remaining stakeholders in July and the Company intends to initiate the proposed offering of new shares in August.

The airline has also recently announced that it had signed a new collective-bargaining agreement which is valid until 30 September 2025 with its cabin crew. The agreement is based on the same principles as the agreement which was agreed to between the parties on 25 June 2020 and thus meets the set objectives of increasing productivity and flexibility for the airline and at the same time ensures competitive compensation for cabin crew members. 

The current agreement results in further reduction in operating cost without negatively affecting the employee terms of cabin crew members. The agreement will now be presented to FFI members who will vote on the agreement but a conclusion from the vote is expected on 27 July 2020. Due to this progress, Icelandair’s pilots will not take over responsibility for onboard safety and the most recent cabin crew layoffs will be withdrawn.

The total number of Icelandair’s passengers was around 18,500 in June 2020 compared to around 553 thousand at the same time last year, decreasing by 97%. The load factor on Icelandair’s flights was 50.9% compared to 88.0% in June 2019. The total capacity was 96% less than in June last year. On-time performance was 90% in June 2020 compared to 64% in June 2019.

The number of passengers on domestic flights was around 12,000 in June, decreasing by 52% from the year before. The total capacity was down by 63%. The load factor was 71.5% compared with 72.3% the year before.

The number of sold block hours in charter flights decreased by 66%. Freight decreased by 9%, measured in Freight Tonne Kilometres.

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