Icelandair Group hf. - Financial Statement Release

First quarter performance in line with management expectations

  -- Loss after taxes USD 26.7 million, as compared to USD 18.3 million in the
     first quarter of 2013
  -- EBITDA negative by USD 13.3 million, as compared to USD 8.3 million in the
     preceding year
  -- The cost of increased scope of business in the peak season, which accrues
     mostly in the first quarter, explains the reduced EBITDA between years
  -- Total revenue increased by 11%
  -- Equity ratio was 32% at the end of March
  -- Net cash from operations was USD 121.4 million, as compared to USD 78.5
     million in the preceding year



Björgólfur Jóhannsson, president and CEO:"Our first quarter results were in line with management's expectations. The
forecast for the year provided for a negative outcome in the quarter, below the
level of the corresponding quarter of last year.  Among the explanations for
the result is that expenses arising out of the increased scope of our business
in the peak period accrue largely in the first quarter. This includes
advertising and marketing expenses, implementation of aircraft and the cost of
bookings and agents' fees relating to the peak season. EBITDA was negative by
USD 13.3 million, down by just short of USD 5.0 million from the first quarter
of the preceding year. 

Total income amounted to USD 191.3 million, increasing by 11% year on year. 
The increase in passenger revenues was most significant in the North Atlantic
market, but the tourist market to Iceland also showed a considerable increase. 
The Company's charter and freight operations were successful, with
profitability increasing between years.  The operation of other subsidiaries of
the Group also showed successful results in line with projections. 

The prospects for Icelandair Group's operations in 2014 are favourable. 
Tourist arrivals in Iceland are expected to hit a record level this year, with
positive consequences for the travel industry.  However, the Company is facing
some uncertainty, as the Icelandic Airline Pilots' Association has announced an
indefinite overtime ban and strikes in May. Also, negotiations have not been
completed with flight attendants and aircraft maintenance engineers. Icelandair
Group's management hopes that agreements can be reached with these three groups
of employees to prevent any disruption to the Company's business activity.  The
Company's earnings forecast remains unchanged, with EBITDA for 2014 projected
in the range of USD 145-150 million."



For further information, please contact:

  -- Björgólfur Jóhannsson, President and CEO of Icelandair Group, tel: +354
     896-1455
  -- Bogi Nils Bogason, Chief Financial Officer of Icelandair Group, tel: +354
     665-8801

Attachments:

Pressrelease Q12014.pdf

Icelandair Group hf 31 3 2014.pdf