LONDON – Icelandic national carrier unveils profit after 3 years of hiatus.
The company recorded an EBIT (Earnings Before Interest and Tax) imported $ 1.2 USD million with an improvement of $63.4 million year-on-year despite headwinds facing the airline industry, such as fuel price, supply chain issues and personnel shortages.
The airline’s operating income rose from $251.4 million to $328.9 million, which is a huge improvement.
This attributes to the increase in passenger revenue, due to an increase in confidence in travel, driving the increase in operating income.
The airline, after covid-19 border restrictions, rose to 76% of pre-pandemic levels or 2019 level in the second quarter of this year. The airline recorded an increase in capacity from the 1st quarter of 2021 of 58%.
This is significant as the figure shows the Icelandic carrier’s recovery is in full swing. Load Factor on the other hand also recorded an improvement year-on-year of 78.5% compared to 47.3%.
The increase in capacity means that the airline also recruited an additional thousand employees during the quarter alone.
Cash Flow & Liquidity
The Icelandic carrier recorded a strong cash flow from its flights this quarter worth $ 121.7 million.
The airline also recorded the highest liquid funds available at the end of June at $ 463 million.
As has been mentioned before the airline is also committed to welcoming six more highly efficient Boeing 737 MAX aircraft, which will also aid the airline to achieve its sustainability goals and also to expand its route network.
As passengers level continues to grow, the welcome of newer aeroplanes is always a bonus to maximise its revenue.
The airline is on its way to becoming highly profitable as of the 3rd quarter of this year, which is significantly higher than the same period of last year.
Bogason Concludes With Strong Messaging…
Bogi Nils Bogason, President & CEO commented on the ever-improving financial performance of the airline:
“Turning a profit in the second quarter is a major milestone on our road to financial sustainability. Utilizing the flexibility of our network and robust infrastructure has allowed us to rapidly increase capacity in line with high demand, achieving improved load factor and higher yields, despite various external factors affecting our business, such as fuel prices more than doubling between years.”
“This kind of turnaround does not happen by itself. It is the result of relentless effort by our people, whose teamwork and dedication have been remarkable during this challenging time. I would like to thank them for all their hard work.
“Our ramp-up has continued into July with more destinations, frequent flights to our most popular destinations and diverse departure times throughout each day.”
“Like the rest of the industry, we have faced various challenges, such as employee shortages at airport operators in Europe and North America that have caused flight disruptions, as well as supply chain issues that have delayed the return of aircraft out of maintenance.”
“We are, however, in a good position to respond to such disruptions with our extensive flight schedule and frequency of flights that enables us to get our passengers quickly and efficiently to their destinations.”
“In addition, our employees have also taken various innovative actions to minimise the impact on our customers. The outlook for Q3 is good with strong bookings.”
“We expect our flight schedule to reach around 83% of 2019 levels in Q3 and around 90% of 2019 in Q4 2022, despite the ongoing geopolitical and economic uncertainty.”
“It is good to see such strong demand for Iceland and the transatlantic market recovering well. The outlook is also good in our cargo and leasing businesses.”
“As we have seen in the past and what the pandemic and the subsequent ramp-up phase have clearly demonstrated is that we have a robust business model and an excellent team of employees.”
“We will continue to work hard on unleashing the opportunities we see for Icelandair going forward.”