Icelandair Group hf. - Company Announcement

Icelandair: Record number of tourists to Iceland foreseen

  -- 15-20% more tourists this summer
  -- A record breaking year in tourism foreseen
  -- 75-100 thousand more tourists in 2011 than last year
  -- Foreign currency income increase by 30 billion ISK is estimated
  -- Added capacity and enhanced marketing efforts are the reasons


According to Icelandair booking status 50% more tourists will be arriving in
Iceland in April by Icelandair than in the same month last year and 15% up from
2009, and the increase will be 15-20% over the spring and summer months ahead.
In view of this it can be estimated that  75-100 thousand more tourists will be
visiting Iceland than last year and the total number will be around 600
thousand. "When we decided to increase our capacity by adding two Boeing 757 aircraft
this year our target was to grow on the market to Iceland, and now the booking
status is showing an estimated increase on that market of about 15-20% for the
spring and summer. This is the result of the added capacity, the whole year
marketing efforts of Icelandair and the positive effects of the “Inspired by
Iceland” campaign. This is also in line with the plans we had earlier announced
and is of course conditioned on no unforeseen changes", says Birkir Hólm
Guðnason, Icelandair CEO. 

The great increase in numbers in April can be attributed in part to the effects
of the volcanic eruption last year, as a large number of passenger cancelled
their flights in the second half of April last year. This also has some effect
in May. Yet the increase from 2009 is also substantial and this April will be
the largest in Icelandair history in terms of the number of passengers
travelling to Iceland. 

A similar number or around 500 thousand passengers visited Iceland in 2009 and
2010. Last spring a considerable increase in the number of tourists to Iceland
was foreseen but the Eyjafjallajökull eruption was discouraging to many and for
a short period a collapse in tourism was imminent. The combined marketing and
promotional effort, "Inspired by Iceland", was influential in changing that
perception and the tourism numbers for the year turned out similar to those in
2009. 

Foreign currency income by tourism in Iceland was 155 billion ISK in 2009 and
2010, so the increase this year will add about 30 billion ISK to that number. "Tourism is one of the foundations of the Icelandic economy and it depends
heavily on the Icelandair route network as these numbers show clearly. When we
grow our capacity as we do this year, an increase in the number of tourists in
Iceland will follow, as our operations are very important to the industry. Thus
it is a great pleasure, now that one year has passed since the start of the
Eyjafjallajökull eruption, that we are looking at a predicted great increase
not only this spring, but also in September and October, as our long time goal
is to lengthen the tourism season and put extra focus on winter tourism", says
Birkir.