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March 2, 2024
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Icelandair is pleased with the change of fortunes it experienced in 2022, which contributed to a drastic reduction in losses. The airline is bullish about 2023 as it sees a very strong recovery of capacity to Iceland this summer and strong bookings to North America. Icelandair bullish about summer as it trims losses.

Icelandair reported a $-5.8 million full-year net loss compared to $-104.8 million in FY21. EBIT was $18.9 million versus $-135.9 million. Total revenues improved to $1.265 billion from $584,9 Icelandairmillion, of which $1.130 billion came from transport revenues. Operating expenses almost doubled to $1.127 billion from $608 million, with fuel 77 percent more expensive year on year. They were 33 percent of all expenses.

After a slow start in 2022 when Iceland was still closed for foreign tourism, momentum picked up from Q2 and resulted in the second half of the year with record revenues. This continued through Q4, which saw a net loss of $-17.8 million, an improvement over $-39.4 million in the same period of 2021. EBIT was $-16.7 million (2021: $-35.7 million), with total revenues at $290.8 million ($192.5 million). Transport revenues from passenger tickets reached a new Q4 record Icelandair at $255.3 million ($156.5 million). Q3 was stronger, with total revenues of $451.7 million and passenger revenues of $408.3 million.

Although the demand for cargo has gone down in the past months, Icelandair kept its revenues from cargo and mail steady. They ended at $19.9 million in Q4, which was an improvement over $18.3 million in Q3 and not far down from the best result in Q1 of $22.5 million. The airline intends to strengthen the position of Iceland as a cargo hub and will add two Boeing 767-300Fs to the network that includes New York, Chicago, Los Angeles, and Liege (Belgium) as the core hubs.

Looking ahead, CEO Bogi Nils Bogason is positive for 2023. Booking patterns are returning to what they used to be pre-pandemic, January has produced record bookings, and all markets are performing well. Iceland is seeing the strongest growth in capacity of all markets, with seat capacity from various airlines up 117 percent from 2019 levels, says Bogason. This compares to +98 percent for the transatlantic market, which is also seeing very strong demand, as has been confirmed by various US carriers.

Icelandair intends to capture a slice of this market by growing the network from 51 to 54 destinations in North America and Europe this year. Boston will see triple-daily services, while six destinations will be served once a day. New on the schedule this year is Detroit. The airline will operate twice daily to seven European destinations and adds Prague, Barcelona, Crete, and Tel Aviv to the network.

757 replacement

Icelandair said it would make a decision on the replacement of its Boeing 757s for some 1.5 years now but still hasn’t come clean. Bogason said today that a decision will be made before the middle of the year, but the carrier apparently still hasn’t made up its mind if the Boeing MAX of the Airbus A320neo family is the better choice the replace the twelve 757s. The airline took delivery of seven MAX last year and will receive another four MAX 8s in 2023. This brings the MAX fleet to twenty and the total international fleet to 35 aircraft, up from 31 last year. The MAX have contributed positively to reducing fuel burn and emissions.

Overall, the carrier expects to grow capacity this year by fifteen to twenty percent. EBIT should be up four to six percent, which is below its original eight percent target. Net Capex should end up between $95 and $115 million.

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Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.

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