Reduced profit for Icelandair in Q3

Icelandair has just released its latest results, these were for the third quarter of this year, which included increased competition and some other challenges, but the airline still managed to report a net profit of $69 million (down 15% year on year). 

During the quarter, the leading Icelandic carrier increased its operational stability resulting in a 2% decrease in unit cost, whilst its on-time performance was up by 5%. Load factor was also rather impressive considering the competition, at least on routes between Iceland and North America, it was up 1.4% of on the same period last year to 86%.

Passenger numbers were up by 9% to around 1.6 million people, the airline says that includes around 550,000 who travelled to and from Iceland and not using the hub and spoke route network using Iceland as a change of aircraft point. 

Bogi Nils Bogason, President & CEO of Icelandair said:  "With a joint effort of our team, we managed to successfully respond to changes in demand to Iceland by leveraging our flexibility and shifting focus to the transatlantic market, resulting in a strong load factor in the third quarter. This, however, impacted our results due to lower yields on the transatlantic market. The market to Iceland is starting to regain its strength and we expect significant performance improvements in the fourth quarter and next year. We continued to drive strong performance in our operations with record on-time performance and robust execution of maintenance programs, resulting in decreased unit cost despite on-going inflationary pressure. We also saw continued improvement in the performance of our cargo operation and our leasing business delivered strong results in the quarter.

In line with our continued focus on improving our competitiveness to ensure profitable growth and long-term success, we launched a comprehensive transformation journey in the first half of 2024, which has already started to materialize. We are leaving no stone unturned in this important journey and have put a plan in place that will significantly contribute to reaching our long-term 8% EBIT goal. By the end of next year, our objective is that the transformation journey will deliver USD 70 million at an annual run rate, with further impact in the following years. Numerous cost reduction projects are already underway and on the revenue side, where we are building on our strong commercial infrastructure, we are enhancing our revenue generation through diverse streams, such as airline partnerships. This year, we have signed strategic partnership agreements with four airlines – Emirates, TAP, Air Greenland and Atlantic Airways. In addition, we reached a significant milestone when introduced as the first airline partner of Southwest Airlines, one of the largest airlines in the US.

The foundation of our business model and our key competitive advantage is the geographical location of Iceland. Our route network is the heart of our business and provides extensive connectivity between Europe, North America, and beyond through our airline partners. Furthermore, with new longer-range aircraft we will be able to open new and exciting markets, which will be fundamental for the future development of Iceland as a tourist destination and a connecting hub for air travel.

The outlook is promising, and we expect significant improvement in profitability in the fourth quarter as well as the full year of 2025. Building on our proven business model and core strengths, coupled with our focused efforts on driving efficiencies and strengthening our competitiveness, I firmly believe that Icelandair is in a prime position to capture emerging opportunities and create long-term value for shareholders and the Icelandic society."

   

3D Wooden Map on the wall is a unique and eye-catching product that is perfect for decorating any living and workspace. Made of high-quality birch wood, the map features intricate details and contours that bring a realistic and beautiful representation of the world to your wall. The 3D design allows for a more immersive experience, making it an ideal addition to a living room, office or study. This product isn't only aesthetically pleasing but also serves as an educational tool, as it can be used to teach geography to children or to plan your next travel adventure. With easy installation and a durable design, a wooden map on the wall is an excellent investment for any decorator or traveller