Icelandair Group hf. - Financial Statement Release

4th Quarter Performance Matches Company's Expectations

  -- Performance below 2010 levels due largely to high fuel prices
  -- Fuel prices 28% higher than in Q4 2010
  -- Profit in 2011 ISK 4.5 billion
  -- Working capital from operations ISK 12.5 billion
  -- Icelandair Group financial position strong
  -- Equity ratio 36% and net interest-bearing debt ISK 11.1 billion
  -- The Board of Directors proposes a dividend of ISK 0.8 billion to
     shareholders in 2012



Björgólfur Jóhannsson, President and CEO

“Icelandair Group's EBITDA in the fourth quarter was negative by ISK 0.1
billion, as compared to a positive result of ISK 1.1 billion in the fourth
quarter of 2010. High fuel prices led to significant increases in cost in the
quarter, which accounts for the decline in performance between years. As
regards the year as a whole we are quite satisfied with the result of ISK 4.5
billion in profit, particularly in the light of the negative impact of
increased fuel prices, a volcanic eruption in Grímsvötn and work stoppages. The
Group's financial position is strong, the equity ratio is 36% and cash and
marketable securities amounted to ISK 13.1 billion at year-end. I would like to
thank our experienced and determined staff for this success. 

The year 2011 was characterised by significant organic growth. We anticipate
still further expansion of our operations in 2012. Icelandair will have the
most extensive flight schedule in its history in place in 2012, and bookings
for the first months of the year are promising. Icelandair Hotels will open a
new hotel by Reykjavik Harbour in the spring, and Air Iceland will continue to
increase capacity on its flights to Greenland. 

Two new aircraft will be added to Icelandair's fleet in the first half of this
year, which will entail some implementation cost. Also, fuel costs are higher
than last year, and the exchange rate of the euro against the dollar is less
favourable; we therefore anticipate that the performance in the first quarter
of 2012 will be somewhat short of last year's. Based on the Company's budget
for 2012 as a whole, we anticipate an EBITDA in the range of 11.0-12.0 billion
an increase from 2011 when EBITDA was ISK 10.4 billion. 



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:

Pressrelease_Q4_2011.pdf

Icelandair Group hf 31 12 2011.pdf