Category Archives: Icelandair

Icelandair reports 2Q net loss of $54.9 million, but strong bookings going forward, happy with the 737 MAX

Icelandair Boeing 737-8 MAX 8 TF-ICY (msn 44354) ZRH (Andi Hiltl). Image: 954463.

Icelandair Group reported a net loss of $54.9 million (USD) in the second quarter.

Highlights:

Extensive growth of our flight schedule

15 destinations re-introduced

Weekly flights in June 160 vs 28 in April

Number of full-time employees up by 600 in the quarter

8 aircraft reintroduced from storage and 3 Boeing MAX added

Considerable EBIT impact

Read the full report: PowerPoint Presentation (globenewswire.com)

The airline continued:

In Q2 Icelandair Group started to ramp up its operations to meet increased demand. The quarter showed strong booking inflow for travel in the second half of the year resulting in net cash from operating activities of USD 65.0 million compared to negative USD 96.8 million in the same quarter last year. The improvement year-on-year was USD 161.8 million. At the end of the quarter total liquidity amounted to USD 362.5 million, thereof cash and marketable securities amounted to USD 190.5 million, increasing by 80.6 million during the quarter.

The Q2 operational results were impacted by the ramp-up of the international route network and COVID-19. During the quarter, 15 destinations were re-introduced to the flight schedule and weekly flights increased from 28 in April to 160 in June. Realizing a positive profit contribution from flights during ramp-up is generally challenging and this year it was further impacted by the pandemic.  The passenger load factor increased steadily throughout the quarter despite the extensive growth in the flight schedule. In addition, the Company invested substantially in operating expenses in preparation for an ambitious flight schedule for the second half of the year to meet the increase in demand. These costs included the reintroduction of aircraft to the fleet after months of storage, the implementation of three new MAX aircraft to the fleet, training of employees returning to duty and increased advertising spend, which in return will generate earnings in later quarters. EBIT for the quarter was negative of 62.2 million USD, an improvement of 35.6 million USD between years. Net loss amounted to USD 54.9 million compared to USD 90.8 million in the previous year.

Cargo revenues were strong in the quarter, up by 35% and freight volumes remain on pre-COVID levels. Outlook for the cargo operations continues to be strong.

Icelandair’s capacity in July will be 43% of the 2019 level compared to 15% in Q2 and the load factor is expected to be around 70% compared to 47% in Q2. Based on the current outlook capacity will increase further in August and load factor will improve from July. However, the final outcome is dependent on how the development of the pandemic and changes in travel restrictions will impact demand.

Bogi Nils Bogason, President and CEO
“The ramp-up has started – we are expanding our operations and increasing the number of flights every week. The second quarter results were still heavily impacted by the COVID-19 pandemic and costs incurred in the quarter associated with ramp-up of the network, however, strong booking flow in June for the second half of the year is the main driver for positive cashflow from operations of over USD 65 million. This is a remarkable turnaround from the previous year. We are grateful and honored for the trust that our customers in all our markets show our Company and our brand.

Since the pandemic hit, we have ensured to safeguard our infrastructure and the flexibility to be able to respond quickly to rapid changes in our markets. With this focus, we have been able to successfully manage our route network, increasing our international network capacity five-fold in the second quarter and transporting over four times more passengers than in Q2 last year. Our domestic operation has been strong in the quarter with our capacity reaching 85% of Q2 2019 levels.

As the airline that brings the majority of tourists to Iceland and as an important employer in the country, a successful ramp-up of our operations is vital for Icelandic tourism, the local economy and society at large. We expect to transport over 400 thousand tourists to Iceland this year that we estimate will generate around USD 646 million in export revenue. We are delighted to welcome back many of our great colleagues following extensive recruitment alongside our ramp-up. We expect to have almost 2,100 full time employees on average in 2021 and estimate that the direct contribution of Icelandair Group’s operations to the Icelandic economy in the form of salary, salary-related expenses and pension contributions will amount to around USD 210 million. The indirect contribution is significantly greater, driving economic benefits not only to the local tourism industry but the Icelandic economy as a whole.

We continue to see strong interest in Iceland as a tourist destination and with a significantly improved booking status in our international route network, our flight schedule is ambitious in the second half of the year. However, we continue to face some uncertainty going forward and will use the flexibility of our route network to adjust to the situation as needed at any given time.  We are optimistic that the US will open for European travelers in the third quarter. The demand for cargo transport remains strong and is also increasing for charter flights in the second half of the year, supporting our revenue generation and sustainable future growth of the Company.

I would like to use this opportunity to thank our employees and partners for their dedication, flexibility and teamwork that has been the key to the successful restart of our network in such a short time in very challenging circumstances.”

In other news, Icelandair made this announcement:

Exploring the possibility of electric and hydro powered flight

We are proud to be among the first airlines to explore the possibilities of electric and hydro power. Icelandair has signed Letters of Intent on two exciting projects that aim to decarbonize flying, a goal that could revolutionize the carbon footprint of domestic flight in as little as a few years. The first is with Universal Hydrogen, a company that has designed a hydrogen conversion kit for regional aircraft such as our DASH-8 aircraft. The second project is with Heart Aerospace, which has the goal of electrifying regional air travel.

We are committed to reducing our impact on the environment and believe we are in a good position to become one of the world’s first airlines to fully decarbonize our domestic network. Heart Aerospace and Universal Hydrogen have introduced exciting solutions for regional aviation that are expected to be available in a few years. As technology advances, we hope to be able to use the experience from decarbonizing our domestic services to accelerate the implementation of carbon neutral energy to power our international flights.

We have worked with Heart Aerospace for some time and will now start an in-depth analysis with Universal Hydrogen. At the same time, we will start discussions with other stakeholders, such as electricity and hydrogen producers, transport companies and airport operators.

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Top Copyright Photo: Icelandair Boeing 737-8 MAX 8 TF-ICY (msn 44354) ZRH (Andi Hiltl). Image: 954463.

Icelandair aircraft slide show:

Icelandair returns to MSP

From MSP:

Icelandair will resume service to Iceland from Minneapolis-St. Paul International Airport (MSP) on June 20, 2021 as international travel from the U.S. continues its recovery from the impacts of the COVID-19 pandemic.

Icelandair will begin operating four flights weekly on 160-seat Boeing 737-8 MAX 8 aircraft to Keflavik International Airport (KEF), which serves Iceland’s capital city of Reykjavik. The service will then expand to daily flights on July 16 on 216-seat Boeing 757 aircraft.

Icelandair reduces annual use of disposable plastic by 20 tons

Icelandair has made this announcement:

Icelandair Group’s corporate responsibility strategy puts great emphasis on reducing the airline’s environmental footprint. One of the projects Icelandair is working on now is to greatly reduce the use of Single use plastics onboard. A large step in that direction is the recent decision to minimize the use of bottled water. The airline estimates this change will reduce the use of plastic by up to 20 tons per year, compared to 2019.

Icelandair had planned to make this change in 2020, but it was delayed because of changes in onboard service related to COVID-19 safety measures. In 2019, Icelandair passengers used 1.6 million bottles of water. Icelandair is still committed to offering excellent service, and passengers will of course be offered water, free of charge.

This is one of many projects Icelandair is working on towards a greener and more sustainable future. Icelandair Group’s corporate responsibility strategy is based on the United Nations’ Sustainable Development Goals (SDGs).  The company has focus on four of the UN‘s Sustainable Development Goals; Responsible Consumption and Production (Goal 12), Climate Action (Goal 13), Gender Equality (Goal 5), and Decent Work and Economic Growth (Goal 8).

Icelandair returns to Portland

Icelandair has made this announcement:

Icelandair has announced the long awaited return to Portland, Oregon with seasonal flights scheduled on Sundays, Wednesdays and Fridays from Portland International Airport starting on July 2, 2021. Nonstop service to Iceland will operate through October 31, 2021 with convenient connections to the hottest destinations in Europe. Flights and schedules are subject to COVID/border regulation and inflow development.

This news comes alongside the announcement that all passengers who can verify full vaccination against COVID-19 will be allowed to travel to Iceland without being subject to additional border measures, such as testing and quarantine. Icelandic customs authorities will accept vaccination certificates from Schengen countries or the World Health Organization’s “yellow card,” as well as, confirmation from travelers who can produce antibody tests showing prior infection.

This development makes Iceland one of the first European nations to open its borders beyond the Schengen area, which covers 26 countries, including Iceland, Norway, Switzerland and Liechtenstein.

Icelandair aircraft photo gallery:

Icelandair aircraft slide show:

Air Iceland Connect will be merged into Icelandair

Icelandair has made this announcement:

Starting on March 16, 2021 Icelandair and Air Iceland Connect, Icelandair Group’s domestic airline operations, will be integrated into one network with all sales and marketing efforts operating under the Icelandair brand.

The integration of Icelandair and Air Iceland Connect will strengthen and simplify the company’s operations while ensuring a sustainable future for domestic services as well as the West Nordic region.

One strong brand, a simplified booking process and unified distribution systems will allow Icelandair to offer a comprehensive range of products and services to all destinations – domestic and international – in one place, with one search, on one ticket.

Icelandair’s domestic destinations include Akureyri, Egilsstaðir, Ísafjörður, and Vestmannaeyjar. Air Iceland Connect and Norlandair have collaborated on flights to several additional destinations in Iceland, such as Bíldudalur and Gjögur from Reykjavík airport, and Grímsey, Vopnafjörður and Þórshöfn from Akureyri airport.

Icelandair is not planning any changes at this time for passengers traveling from Reykjavik or Akureyri. However, new products and services are in development and will be introduced later this spring (2021).

Photos: Air Iceland Connect.

 Bogi Nils Bogason, CEO of Icelandair

“The integration of Icelandair and Air Iceland Connect is an important step that will create a stronger and more streamlined airline with more options and improved customer service. Domestic flights are crucial for Icelanders and with this step we can further strengthen our current network for all passengers with more accessibility and more competitive fares.

This is, however, a complex project with many integral details. That’s why we put great emphasis on clear communication with customers and open dialogue with key stakeholders about how we will ensure the development of domestic flights with the value and experience of our customers in mind.

As our domestic flights become more visible through Icelandair’s booking engines, we hope to open more of Iceland to the world with easy connections to our network in Europe and North America while increasing the number of tourist within our domestic operations.”

Icelandair returns its two Boeing 737 MAXs to service

Icelandair made this announcement:

Two Boeing 737 MAX aircraft return to service in Icelandair’s flight schedule in March 2021.

After an extensive process with worldwide participation, the North American and European aviation authorities have now recertified the Boeing 737 MAX aircraft.

Taking 20 months, the recertification process involved expert engineers, scientists, researchers, mechanics and pilots from various countries worldwide, including independent representatives from NASA and the US Air Force.

After the completion of the most thorough inspection process in aviation history, the result is certification from the major authorities, including:

  • The Federal Aviation Administration (FAA) in the USA
  • Transport Canada (TC) in Canada
  • The European Union Aviation Safety Agency (EASA) in Europe, of which Iceland is a member

Icelandair aircraft photo gallery:

Icelandair aircraft slide show:

Icelandair Boeing 767-300 in action at the Troll Airfield in Antarctica

From Flugblogg: Icelandair Boeing 767-300 TF-ISN landing at the Troll Airfield in Antarctica in February 2021.

Video:

TF-ISN departing from Antarctica:

From Norwegian Polar Institute:

Icelandair lands in Antarctica

Icelandair made this announcement on social media:

We usually fly closer to home, near the Arctic Circle, but this flight was even cooler: Today, an Icelandair Boeing 767-300 landed at the Norwegian research station Troll in Antarctica. The charter flight is to pick up the research center’s scientists and fly them home to Norway.

The journey has involved a lot of planning due to the unique conditions (e.g. a landing strip on ice), and involves 6 pilots, 13 crew and 1 flight engineer. They’re all on their way back to the northern part of the globe, and we look forward to sharing more of their adventures in Antarctica with you next week – because snow, ice and wind are truly our elements.

Icelandair aircraft photo gallery:

Icelandair aircraft slide show:

Icelandair fires its flight attendants after negotiations fail, reverses course

 

Icelandair made this announcement:

As previously announced, Icelandair has been negotiating with the Icelandic Cabin Crew Association (FFI) on a new long-term collective-bargaining agreement for the company’s cabin crew members. The objective has been to ensure the long-term competitiveness of the Company while safeguarding the  competitive compensation and working conditions of the Company’s cabin crew members.

Unfortunately, the negotiations with the Icelandic Cabin Crew Association have come to an end without a conclusion. On July 8, 2020, the members of the Icelandic Cabin Crew Association, rejected a new collective-bargaining agreement which had been agreed to and signed between the parties’ negotiation committees. Although the negotiations were continued after the results of the voting were announced, it has now become evident that a mutually agreed conclusion will not be reached.

Icelandair has been exploring other options regarding safety and service onboard its aircraft. As a result, the Company will instruct its pilots to assume responsibility for safety on board  but services will continue to be at a minimum, as it has since the impact of Covid-19 started. The Company expects to initiate discussions with a counter party within the Icelandic labor market on future terms for the Company’s cabin crew members.

Due to this unfortunate situation, Icelandair will permanently terminate the employment of its current cabin crew members and permanently discontinue the employment relationship between the parties. The Company’s pilots will temporarily take over responsibility for onboard safety on July 20.

Update: Icelandair later reversed course and issued this statement:

“Despite the failure of negotiations between Icelandair and the Icelandic Cabin Crew Association (FFI), the parties managed to resume discussions and signed a new collective agreement which is valid until September 30, 2025”.

“The current agreement results in a further reduction in operating costs without adversely affecting the working conditions of cabin crew members,” the statement said. “As a result of these advancements, Icelandair pilots will not take responsibility for on-board safety and the most recent cabin crew layoffs will be withdrawn.”

Looking back:

On July 11, 2020 Icelandair celebrate 75 years since the first international passenger flight from Iceland, when a Catalina flugbátur (‘flightboat’, or seaplane) flew a six-hour flight from Reykjavík to Largs Bay, Scotland.

Icelandair aircraft photo gallery:

Icelandair aircraft slide show:

https://airlinersgallery.smugmug.com/frame/slideshow?key=VnkfGG&speed=3&transition=fade&autoStart=1&captions=0&navigation=0&playButton=0&randomize=0&transitionSpeed=2

airBaltic and Icelandair announce codeshare agreement

Icelandair and airBaltic have signed a codeshare agreement that opens new markets for the carriers by allowing them to sell and issue airline tickets jointly throughout their networks. airBaltic customers will benefit from convenient access to Iceland and North America. At the same time, Icelandair passengers can now purchase a ticket to a number of airBaltic destinations in the Baltics and beyond.

Currently airBaltic performs direct flights from Riga to various European business hubs and to such popular leisure destinations as Dubrovnik, Rijeka and Split in Croatia, Barcelona in Spain, Nice in France, Larnaca in Cyprus as well as Rome, Catania and Milan in Italy. In addition, during upcoming weeks airBaltic will launch direct flights from Riga to Billund (Denmark), Reykjavik (Iceland), Madrid (Spain), Zurich (Switzerland), Turku (Finland), Warsaw (Poland), Prague (Czech Republic), Stuttgart (Germany), Budapest (Hungary) and Liepaja (Latvia). By the end of August 2020, airBaltic plans to connect Baltics on 69 routes. airBaltic also offers various direct services from Tallinn and Vilnius.