The affects of the Boeing 737 MAX grounding could be felt for years. The expensive grounding is forcing some carriers to question their allegiance with Boeing as they seek compensation for the grounding.
Icelandair has been a staunch supporter of Boeing and has Boeing 737-8 MAX 8s both on the ground and additional MAX aircraft on order including the MAX 9.
Now the carrier is reconsidering a replacement for its large Boeing 757 fleet. The new MAX aircraft were the planned replacement but that may now be in doubt.
Now the carrier is considering other options as it discusses compensation from Boeing for the expensive grounding. Is this a bargaining strategy or does Airbus have an opening to sell its Airbus A321neo aircraft?
Top Copyright Photo: Icelandair Boeing 757-208 WL TF-FIJ (msn 25085) LIS (Ton Jochems). Image: 946478.
Icelandair (Keflavik) due to increased demand, will move from seasonal to year-round service from Washington Dulles International Airport to Icelandair’s hub at Keflavik International Airport.
Additional flights will begin in January 2015 on Tuesdays, Thursdays, Saturdays and Sundays, providing the Mid-Atlantic region year-round, nonstop access to Iceland for the first time since 2006.
With this announcement of their seventh year-round gateway, Icelandair now offers service from 13 North American cities, making their 2015 route network the largest in its history.
Icelandair provides service to Iceland from Boston, New York (JFK and Newark), Seattle/Tacoma, Denver, Washington, D.C., Toronto (Pearson) and Edmonton, with seasonal service from Minneapolis/St. Paul, Sanford (near Orlando), Anchorage, Halifax, and Vancouver. Connections through Icelandair’s hub at Keflavik International Airport are available to more than 20 destinations in Scandinavia, the U.K. and Continental Europe.
Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 757-208 TF-FIJ (msn 25085) prepares to land at Washington’s Dulles International Airport (IAD).
Icelandair Group (Icelandair) (Keflavik) reported its financial results for 2013 (all dollar figures in US dollars):
Profit before taxes amounted to $71.0 million, up by $13.6 million or 24% between years
Income rose between years by 13.8%
EBITDA in the fourth quarter amounted $6.8 million, up by $0.9 million between years
The equity ratio at year-end 2013 was 42%, as compared to 39% at year-end 2012
Net interest-bearing debts were reduced by $95.6 million over the year and were negative at year-end in the amount of $77.5 million
The Board of Directors has proposed a dividend payment of ISK 2,150 million to shareholders in 2014, which corresponds ISK 0.43 per share.
Björgólfur Jóhannsson, President and CEO
“The Company’s performance in 2013 is good and considerably better than our budget projected in the beginning of the year. Profit before taxes amounted to $71.0 million, up by $13.6 million between years. Like recent years, last year was characterised by profitable organic growth, which is in line with our strategy. Capacity in our route network was increased by 16% from last year, and the number of passengers increased by 12%. The Company’s largest market in international flight services is the market between Europe and North-America, which has been the principal driving force of our growth in recent years. The tourist market to Iceland has also shown significant growth, and the demand for domestic tourist services has increased rapidly. Concurrently with this expansion, companies within Icelandair Group have found opportunities for profitable growth.
The rapid growth of recent years has tested the Company’s infrastructure, which is now stronger than ever before. The main reasons for the good performance of the year include favourable external conditions, increase in tourism in Iceland and last but not the least our strong team of employees which are a very important factor in what we have achieved. It is always satisfying when things are going well, but there is no room for complacency. There are various challenges ahead that we need to address. The principal challenge is the increasing competition, and in addition our contracts with some of our classes of employees have expired, which creates some uncertainty. Nevertheless, the Company’s business model has proven sound, our finances are solid and our cash position is strong. Icelandair Group is therefore well positioned to take on the future. The Company’s budget for 2014 projects EBITDA at $145-150 million.”
Trip Report on Icelandair by the Sydney Morning Herald on a London-Halifax trip: CLICK HERE
Copyright Photo: Stefan Sjogren/AirlinersGallery.com. Boeing 757-208 TF-FIJ (msn 25085) lands in Stockholm (Arlanda).
Icelandair (Reykjavik) will add the Reykjavik (Keflavik)-Seattle/Tacoma route (four times weekly) for the summer season starting on July 22. The new route will be operated with 183-seat Boeing 757-200s.