Icelandair Group hf. - Company Announcement

Icelandair Group announces continued growth in international flights for 2015

  -- Passenger increase estimated to be 300,000+
  -- Direct flights to 39 destinations
  -- Capacity increase of 12% between years
  -- Daily flights year-round to 9 cities:  Amsterdam, Boston, Copenhagen,
     London, New York, Oslo, Paris, Seattle and Stockholm
  -- Two new destinations:  Birmingham, UK and Portland, Oregon, USA

Icelandair Group's international flight schedule for 2015 will be the largest
in the company´s history.  The schedule will see a 12% increase from 2014 and
include two new gateways plus added capacity in several gateways in both North
America and Europe.  The number of passengers is estimated to be 2.9 million in
2015, an increase of approximately 300,000.  A total of 23 Boeing 757 aircraft
will be used in the Route Network next summer, two more than this summer. 

The operation of the international Route Network has more than doubled since
2009.  The number of flights next year will exceed 10,000, while only six years
ago that number was 4,500.  At that time passengers numbered approximately 1.3
million or 45% of the number estimated in 2015. This continued growth will
strengthen the tourist industry of Iceland further. 

The company will increase flights to most of its destinations next summer.
Specifically, 12 flights will be added weekly to both North America and Europe
for a total of 24 flights,  from 254 departures from Keflavik airport weekly,
to 278 departures over the high season next summer. Birmingham, UK and
Portland, Oregon, USA will be added as new destinations but flights to
St.Petersburg, Russia will not continue. 

As an example of how the company's Route Network is consolidating and
strengthening with these changes, it is worth mentioning that from today there
will be flights to seven cities in North America year-round, while two years
ago there were four. Today there are daily flights year-round to six cities in
Europe where Amsterdam and Paris have been added in the last two years. 

The Route Network has been built around the hub at Keflavik International
Airport, with morning flights to cities in Europe and afternoon flights to
North America. In recent years the company has been building up a secondary
bank of flights with departures just before noon. Today the secondary bank
includes two daily departures to North America and four departures to cities in
Europe. The third daily departure to North America will now be added and the
fifth departure to Europe. Growth of the secondary bank presents opportunity of
two different departure times within the same day, eases the congestion at
Keflavik Airport and supports the primary bank. 

The company will start scheduled flights to and from Portland, Oregon on the
west coast in the US, on May 19th, 2015. The population of Portland
metropolitan area is around 2.3 million. Portland will be the company‘s 14th
destination in North America. There will be flights two times per week, on
Tuesdays and Thursdays until October 20th. 

Flights to Birmingham, UK have previously been announced, and will start in
February 2015. Birmingham will be the company‘s fifth destination in the UK.
There will be flights two times in a week, on Thursdays and Mondays, starting
from February 5th, 2015. 

For further information, please contact:

Björgólfur Jóhannsson President and CEO, Icelandair Group, tel. +354-896-1455
Bogi Nils Bogason, CFO, Icelandair Group, tel. +354-665-8801