Icelandair has achieved what it deemed “robust third-quarter results” after posting a net profit of $57.8 million. The airline generated its highest-ever passenger revenues exceeding $400 million after more than doubling its passengers from last year.

Record passenger revenue for Icelandair

The Icelandic carrier posted revenues of over $487 million in its latest quarterly results, with a record $408.3 million coming from passenger operations. Earnings before interest and tax (EBIT) stood at $92.7 million with a 19% EBIT margin, a big improvement on the $8.2 million posted for Q3 2021.

Resurgent transatlantic demand saw Icelandair carry 1.4 million passengers for the quarter, more than double year-on-year. Unit revenue, up 38%, was aided by the airline’s well-received Saga Premium product, leaving Icelandair’s finances “robust with strong liquidity.”

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Icelandair Boeing 757-300

Bogi Nils Bogason, President & CEO at Icelandair, stated,

“Delivering such robust financial result driven by record revenues, clearly demonstrates the strength of our business model. By using the flexibility of our route network and operations, we were able to make the most of opportunities in all our markets in the quarter. We reached 82% of 2019 capacity and more than doubled the number of passengers between years.”

This is the second consecutive quarterly profit posted by Icelandair after the carrier returned to profitability in Q2. As Bogason noted in July, the flexibility of Icelandair’s network and operations once again played a key role.

By July, hub Keflavik International Airport (KEF) reached 101% of its pre-pandemic capacity, with Iceland’s flag carrier making up around 60% of all flights.

Transatlantic market thriving

43% of the carrier’s passengers last quarter were transatlantic, demonstrating how vital this market is for Icelandair. Keflavik Airport’s strategic position as a connecting hub across the Atlantic Ocean clearly drives traffic, but Icelandair is also keen to play up the country itself as a tourism destination.

Icelandair Boeing 757-200

Photo: Vincenzo Pace | Simple Flying

Bogason added,

“It is great to see how fast our transatlantic market has recovered, accounting for 43% of the total number of passengers in the quarter.”

Load factor for Icelandair’s North American market stood at 89%, higher than Europe (86%) and domestic (76%). The carrier is set to add cargo capacity to North America with two Boeing 767Fs bolstering Icelandair’s belly capacity in January.

Winter challenges to come

The airline has warned it is “expecting some headwinds this winter”, particularly regarding rising interest rates and operating costs. Not all went swimmingly for Icelandair last quarter – airport disruption, staff shortages and supply chain issues had a major impact, leading to a 70% on-time performance (OTP).

Icelandair said,

“The on-time performance was 70%, negatively affected by staffing issues at major airports this summer. This in turn affected customer experience but Icelandair´s extensive flight schedule, with its high frequency of flights and diverse departure times within each day, enabled us to minimize the impact that these disruptions had on passengers.”

Despite the impending challenges, Icelandair predicts it will recover to 98% of its pre-pandemic levels and said booking patterns are strong for early 2023.

Have you flown with Icelandair recently? How did you find the experience? Let us know your stories in the comments.


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