Icelandair’s 2024 financial results painted of proactive strategic maneuvering in a challenging aviation landscape.
While the airline reported a net loss for the year, a strong fourth quarter performance and strategic initiatives signal a positive trajectory for 2025.
This analysis delves into the key figures and strategic moves that position Icelandair for continued growth and profitability.
Q4 2024: A Turning Point
Icelandair demonstrated significant improvement across its business units in the fourth quarter of 2024. Revenue saw a 10% year-over-year increase, reaching USD 349 million.
This growth was fueled by a 1.5% rise in unit revenue, driven primarily by a higher load factor. More passengers filled more seats, indicating increased demand and efficient capacity management.
Cost control measures also played a crucial role. Unit costs decreased by 3% compared to the same period last year, thanks to operational efficiencies and lower fuel costs. These cost savings helped offset the impact of inflationary pressures and other economic headwinds.
A record number of passengers traveled with Icelandair in Q4, signaling a robust recovery in the market to Iceland. This resurgence in tourism is a vital component of Icelandair’s success, as it strengthens the airline’s core business.

Full Year 2024: Challenges and Strengths
Despite the positive Q4 performance, Icelandair reported a net loss of USD 20 million for the full year 2024, compared to a net profit of USD 11 million in 2023. This underscores the challenges faced by the airline industry throughout the year. However, several bright spots emerged.
The leasing business performed strongly, and cargo operations returned to positive EBIT, demonstrating diversification and resilience within Icelandair’s portfolio. The airline transported 4.7 million passengers in 2024, a 9% increase from the previous year, showcasing its ability to attract and retain customers.
Operational improvements were also a key focus. On-time performance increased significantly by 5.6 percentage points, reflecting Icelandair’s commitment to customer satisfaction and operational excellence.
This improvement positions Icelandair as a reliable choice for travelers, enhancing its competitive edge. The addition of the first Airbus aircraft in Icelandair’s history in December marked a significant milestone in the airline’s fleet modernization strategy.

Strategic Initiatives and Future Growth Prospects
Icelandair’s leadership is not resting on its laurels. Recognizing the need for continuous improvement, the airline launched a comprehensive transformation journey in 2024.
This initiative focuses on operational enhancements designed to deliver over USD 20 million in annual impact. Icelandair anticipates this figure to reach USD 70 million by the end of 2025, as further improvements are implemented.
These transformation efforts, combined with a healthy operating cash flow of USD 221 million and total liquidity of USD 347 million, provide a solid financial foundation for future investments and growth.

Looking Ahead to 2025
Icelandair’s outlook for 2025 is optimistic. Projected EBIT is estimated between USD 40-60 million, indicating a strong return to profitability. Current booking status is stronger than last year, suggesting continued demand for travel to and from Iceland.
The airline plans an 8% increase in capacity, strategically focused on off-peak seasons. This approach aims to improve resource utilization and provide customers with greater travel flexibility. By expanding its route network and offering more options, Icelandair aims to capture a larger share of the market.
CEO Bogi Nils Bogason expressed confidence in the airline’s future, highlighting the significant improvements achieved in Q4 and the promising prospects for 2025.
The combination of strong operational performance, strategic cost management, and a commitment to customer satisfaction positions Icelandair for continued success in the competitive aviation industry.
The airline’s focus on transformation and innovation signals its dedication to long-term growth and profitability.

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