Icelandair Group hf. - Company Announcement

Icelandair Shifts Focus In North-Atlantic Flights In 2008

Reykjavik 10 December 2007

•	Toronto New Destination
•	Baltimore operation shut down.
•	Added Capacity to London 
•	Up to 5 daily flights to Copenhagen
•	Morning departures to the US

Icelandair will shift the focus of its North-Atlantic operations next year.
Scheduled flights to Toronto will start in May, while Baltimore will be taken
out of the network this winter. The morning flights to Boston and New York out
of Keflavik during the summer will continue this year and capacity to London
will be increased slightly. Icelandair will terminate the Baltimore service
effective 13 January 2008, while Toronto flights will begin 2 May 2008. 

“Our schedule for 2008 will be similar to our 2007 schedule but we are changing
our North-Atlantic operations by moving to Toronto in Canada from Baltimore. We
have expanded considerably over the past few years, so the focus in 2008 is on
making adjustments to our network.  We have a strong focus on serving our
domestic Icelandic market and visitors to Iceland and we are fine-tuning the
Icelandair network and our capacity in order to increase its profitability”,
says Jón Karl Ólafsson, CEO of Icelandair. 

Toronto is Canada's largest city and transportation centre. “This city has the
potential to become a very popular destination for Icelanders as it's a
thriving multicultural city. It also offers possibilities for inbound tourism
to Iceland as Toronto is the key Canadian transportation hub for millions of
people. Last year we started flying again to Halifax, so we have a strong focus
on Canada at the moment”, says Jon Karl. “We say goodbye to Baltimore now after
flying to the city for years. Unfortunately the route became less profitable
recently, following the departure of thousands of US citizens from the US
military base in Iceland.” 

Capacity to London will be increased slightly next year with two flights a day,
as well as, continued flight to Manchester and Glasgow. The capacity to
Copenhagen will be similar to last years with up to 5 flights a day next
summer, and an average of 4 flights per day. 

Next spring Icelandair will again start morning flights out of Iceland to the
US, as well as, morning flights from Paris and Frankfurt at eight in the
morning to Iceland. “Our network is based on a 24 hour rotation where our
aircraft leave Iceland for Europe in the morning, return in the afternoon, then
leave for North-America for a return to Iceland in the morning. We had a good
success with this “reverse” rotation last summer and will continue this year.”
Said Jón Karl. 

“Next summer we are flying from Iceland to 25 destinations in Europe and North
America with varying frequency to each destination. We are constantly reviewing
and fine-tuning our schedule in order to offer the best possible service for
our clients in Iceland and our other destinations”, says Jón Karl Ólafsson. 

With roots stretching back over seventy years, Icelandair is one of the world's
longest established airlines.  Icelandair Group, of which Icelandair is one
subsidiary, currently employs nearly 3 thousand people in ten countries and is
a public company listed on the OMX Iceland stock exchange as ICEAIR. Icelandair
Group owns and operates profitable and dynamic travel and transport companies
delivering safe, reliable and convenient services. 

In addition to the international passenger airline Icelandair, which services
more than a dozen destinations in the N-America and Europe, the Group consists
of flight-, and travel service companies that form the foundation of the fast
growing Icelandic aviation and tourism industries. The Group includes:
Icelandair, Travel Service s.a., Icelandair Cargo, Bluebird Cargo,
Loftleidir-Icelandic, Air Iceland, IceLease, Iceland Travel,  Icelandair Ground
Services, Icelandair Hotels and Icelandair Shared Services. 

Further details please contact

Guðjón Arngrímsson
gudjon@icelandairgroup.is
Int+354 864 5849