0ERU Icelandair Group Hf

Summary Q4 2021The recovery of Icelandair’s operations continued in the fourth quarter with capacity in the route networkreaching 65% of Q4 2019 levels compared to 50% in the third quarter. Unit revenues in the quarter wereonly 3% lower than Q4 2019 despite a significant negative impact from the Omicron wave in Decemberand lingering effects of the Delta wave in October. Total income totaled USD 193 million and more thantripled compared to the fourth quarter 2020. The opening of the US borders for European travelers inNovember was an important milestone allowing travel between all of Icelandair’s markets for the firsttime since March 2020.

Icelandair carried around 545 thousand passengers in the fourth quarter 2021 compared to 52 thousandin the same quarter 2020. The market “to” Iceland was the Company’s largest market and accountedfor 45% of total passengers. The load factor in the fourth quarter 2021 was 70.3% and improved by 1.9percentage points compared to the third quarter despite the considerable negative impact of theOmicron variant on travel in December. On-time-performance in the international route network was78%. The hard work and resourcefulness of the Company’s employees ensured minimal disruption tothe flight schedule and smooth traveling for customers in the quarter, especially around the holidayseason when many of the Company’s employees were impacted by the Omicron variant.

Cargo operations continued to be strong with volumes and revenues exceeding pre-Covid levels,especially on the transit market. Revenue from the Company’s leasing operation increased betweenyears although still being 60% of 2019 levels. Two of the leasing projects included 13 flights to Antarcticawith scientists and tourists. These flights were successful and required extensive preparation by manydepartments within Icelandair, including flight and technical operations, maintenance, crew and training.Net loss in the quarter was USD 39.4 million and decreased by USD 43.9 million compared to 2020.EBIT improved between years by USD 24.6 million, which is the strongest EBIT result in the fourthquarter since 2016. The market price of fuel was on average 12% higher than in Q3 and 91% highercompared to Q4 last year. The Company’s financial position was strong at year-end with total liquidityamounting to USD 435.0 million and equity ratio at 19%.

Bogi Nils Bogason, President & CEO"The year 2021 was a year of recovery. After having focused on preserving our infrastructure, knowledgeand maintaining financial strength throughout the pandemic, we were in a strong position for an efficientramp-up as soon as passenger demand started to increase in 2021. Using our flexibility to adapt to thesituation at any given time, we went from serving only four destinations with 10 weekly departures fromIceland early in the year to 200 departures a week to 34 destinations during the summer peak. The totalnumber of passengers on international and domestic flights was around 1.5 million and at the end of theyear we had reached 65% of our 2019 capacity. We also strengthened our team, recruiting almost onethousand employees during the year. Our cargo services continued to return good results in 2021 withboth volumes and revenue exceeding pre-Covid levels. Although our leasing operation was challengingduring the year, we seized new opportunities on this front that contributed greatly to the Company’srevenue generation. At the same time as we ramped up our services, we took strategic actions tostreamline and simplify our operations and further strengthen our focus on our core business, aviation.This included the integration of Air Iceland Connect, our domestic flight operation, into Icelandair, thesale of Iceland Travel and completing the sale of Icelandair Hotels. Our clear goals and focused strategyresulted in a strong recovery and robust financial position at the end of the year.Sustainability is at the center of our strategy, and we monitor our economic, social and environmentalimpacts throughout the year. It is a pleasure to announce ambitious new goals of reducing our carbonemissions. In line with the airline industry’s goals, we have made a commitment to reach net zeroemissions by 2050. In addition, we have set a medium-term target of reducing our carbon emissions by50% per operational ton kilometer by 2030 compared to 2019. Reaching these goals will requirecontinued efforts through a combination of measures, such as fleet renewal, operational improvements,the implementation of sustainable aviation fuels as well as carbon offsetting. The implementation of theBoeing 737 MAX aircraft into our fleet is an important contributor to reducing our emissions, in additionto the operational efficiencies that they bring to our business and the great fit within our network andfuture plans. We took delivery of three new MAX aircraft during the year and are receiving additionalfive in 2022, bringing the total number of MAX aircraft to 14 this summer out of a total of 30 aircraft withinour international passenger network fleet.To better reflect our ambitious strategy, focusing on digital transformation and customer experience, wehave made changes to our organizational structure and strengthened our team. With a clear strategy, arobust financial position and an outstanding team of employees, I believe we are in a strong position totake advantage of market opportunities and reach our primary post-pandemic objective to return tosustainable operating results. We are aiming for a 3-5% EBIT ratio and to turn a net profit for the fullyear 2022. However, various factors, such as possible continued impact of the pandemic on demandand fluctuations in fuel price can affect the Company’s operations and financial results.I would like to thank our employees for their sheer dedication and hard work, our shareholders for theircontinued support and last but not least our customers for their trust throughout challenging times andtheir encouragement as we step into a brighter future."Webcast 4 February 2022An investor presentation will be webcast in relation to the publication of the results at 8:30 GMT onFriday, 4 February 2022, at http://icelandairgroup.is. Bogi Nils Bogason, President & CEO of IcelandairGroup, and Ivar S. Kristinsson, CFO, will present the Company’s results and answer questions. Thepresentation and Q&A will take place in English. The presentation will be available after the meetingon the Icelandair Group website: http://icelandairgroup.is and under Company News on:http://www.nasdaqomxnordic.com/news/companynews

In line with the ESEF requirements, the primary statements can be found in the .zip file.

Contact information

Investors: Iris Hulda Thorisdottir, Director Investor Relations. E-mail: iris@icelandair.isMedia: Asdis Petursdottir, Director Communications. E-mail: asdis@icelandair.is

Attachments

• Pressrelease Q4 2021
• 549300UMI5MBLZSXGL15-2021-12-31-en
• 549300UMI5MBLZSXGL15-2021-12-31-en.zip-viewer
• Icelandair Group hf - Consolidated Financial Statements for the year 2021

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