Icelandair Group hf. - Financial Statement Release

Icelandair Group- Improved results between years in spite of high fuel prices

  -- Total turnover was ISK 16.0 billion, down by 2% between years
  -- EBITDA was negative by ISK 0.2 billion, as compared to a positive result of
     ISK 0.2 billion in the preceding year
  -- EBIT was negative by ISK 1.4 billion, as compared to a negative result of
     ISK 1.2 billion in the same period of last year Depreciation amounted to
     ISK 1.2 billion, down by ISK 0.1 billion from the preceding year
  -- Financial cost amounted to ISK 0.4 billion, as compared to ISK 0.7 billion
     in the preceding year
  -- Loss after taxes amounted to ISK 1.1 billion, as compared to an after-tax
     loss of ISK 1.9 billion at the same time in 2010
  -- Cash and marketable securities at the end of the quarter amounted to ISK
     18.1 billion, as compared to ISK 13.0 billion at year-end 2010
  -- Total assets amounted to ISK 91.4 billion and the equity ratio was 30% at
     the end of the first quarter of 2011, as compared to ISK 84.2 billion and
     34% respectively at year-end 2010

Björgólfur Jóhannsson, President and CEO:

“The Group's results in the first quarter improved between years despite the
huge increases in fuel prices. Losses amounted to ISK 1.1 billion, as compared
to ISK 1.9 billion at the same time last year. EBITDA was negative by ISK 0.2
billion, as compared to a positive result of ISK 0.2 billion last year. Fuel
prices on average were 42% above the prices in the first quarter of last year.
The resulting increase in the Group's cost is assessed at ISK 0.8 billion. In
light of external conditions we are satisfied with the outcome of the quarter. 

The capacity in the Company's international route network was increased by 12%
between years, and the number of passengers increased by 13%. The number of
passengers increased in all our markets, with largest increase, 20%, in the
North Atlantic market. Icelandair's load factor was the highest ever recorded
for this quarter, at 71%. The booking position for the coming months is
favourable and there are indications of a record number of tourists to Iceland.
  The exchange rate trends of the euro and dollar have been favourable to the
Company, partly offsetting the increase in fuel prices. The Company's EBITDA
forecast for the year as a whole is therefore unchanged at ISK 9.5 billion.” 

The Company is financially strong. Cash and marketable securities at the end of
the quarter stood at approximately ISK 18 billion, up by over ISK 5.1 billion
from the start of the year. Equity stands at ISK 29.4 billion and the equity
ratio at 30%.” 

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

Attachments:

Icelandair Group hf Q1 2011.pdf

PressRelease_Q1.pdf