Consolidated Financial Statements of Icelandair Group hf. 2025
Consolidated Financial Statements of Icelandair Group hf. 2025
Contents
Endorsement and Statement by the Board of Directors and the CEO ...................................................................................... 2
Consolidated Income Statement and other Comprehensive Income ........................................................................................ 9
Consolidated Statement of Financial Position ......................................................................................................................... 10
Consolidated Statement of Changes in Equity ........................................................................................................................ 11
Consolidated Statement of Cash Flows .................................................................................................................................. 12
Notes ...................................................................................................................................................................................... 13
Note Page
1. Reporting entity............................................... 13
2. Basis of accounting ......................................... 13
3. Functional and presentation currency ............. 13
4. Use of estimates and judgements................... 13
5. Changes in accounting policies ...................... 14
6. Operating segments ....................................... 14
7. Operating income ........................................... 16
8. Operating expenses ........................................ 16
9. Auditor's fee .................................................... 17
10. Depreciation and amortization ........................ 17
11. Finance income and (finance cost) ................. 17
12. Operating assets............................................. 18
13. Mortgages and commitments ......................... 18
14. Insurance value of aircraft and
flight equipment............................................... 18
15. Insurance value of buildings and
other operating assets .................................... 19
16. Right of use assets ......................................... 19
17. Intangible assets and goodwill ........................ 19
18. Impairment test ............................................... 20
19. Investment in associates ................................ 21
20. Non-current receivables and deposits ............ 22
21. Income taxes .................................................. 22
Note Page
22. Inventories ....................................................... 24
23. Marketable securities ...................................... 24
24. Trade and other receivables ............................ 24
25. Cash and cash equivalents ............................. 24
26. Equity .............................................................. 24
27. Earnings per share .......................................... 25
28. Loans and borrowings ..................................... 25
29. Lease liabilities ................................................ 27
30. Provisions and other liabilities ......................... 28
31. Trade and other payables................................ 28
32. Deferred income .............................................. 28
33. Financial risk management ............................. 29
34. Financial instruments and fair value ................ 36
35. Capital commitments ....................................... 37
36. Related parties ................................................ 37
37. Litigations and claims ...................................... 38
38. Group entities .................................................. 38
39. Ratios .............................................................. 38
40. Investment and financing without
cash flow effect ................................................ 38
41. Significant accounting policies ........................ 39
42. Standards issued but not yet effective ............. 48
43. Significant events after period end .................. 48
Appendices:
Corporate Governance Statement .......................................................................................................................................... 49
Non-Financial Reporting ......................................................................................................................................................... 55
Operational Risk ..................................................................................................................................................................... 82
Quarterly Statement ................................................................................................................................................................ 85
Alternative performance measures (APMs) ............................................................................................................................ 91
Consolidated Financial Statements of Icelandair Group hf. 2025 2
Endorsement and Statement by the Board of Directors and the CEO
Icelandair Group hf. is an Icelandic aviation company with decades' long history of operating in the international airline sector.
The Icelandair Route Network is the heart of the business model which takes advantage of the unique geographical location
of Iceland serving as a connecting hub between Europe and North America. Icelandair Group is the parent company of several
subsidiaries, that in addition to Icelandair include most notably Icelandair Cargo and the aircraft leasing brand Loftleidir
Icelandic. The Company's strategic initiatives support its vision of “Bringing the spirit of Iceland to the world” and its mission of
offering smooth and enjoyable journeys to, from, via and within Iceland – the Company's hub and home. The Consolidated
Financial Statements of Icelandair Group hf. for the year 2025 have been prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union and additional Icelandic disclosure requirements. The
Financial Statements comprise the Consolidated Financial Statements of Icelandair Group hf. (the "Company") and its
subsidiaries (together the “Group”) and have been audited by KPMG.
Operations in the year 2025
According to the Consolidated Income Statement, loss for the year 2025 amounted to USD 9.5 million. When other
comprehensive income is considered, total comprehensive income amounted to USD 15.5 million. Equity at year end
amounted to USD 286.4 million, including share capital in the amount of USD 311.0 million, according to the Consolidated
Statement of Financial Position. Reference is made to the Consolidated Statement of Changes in Equity regarding information
on changes in equity.
Net loss in 2025 amounted to USD 9.5 million, improving by USD 11.0 million from 2024. A significant change in the operating
environment in 2025 had a negative impact on the financial results. Geopolitical developments have weakened the
USD, which directly affects the margins of Icelandair and the competitiveness of Iceland, in addition to putting pressure on
airfares in the transatlantic market. Furthermore, Iceland's unsustainable contractual wage development in recent
years has also outpaced that in comparable countries and created challenges for export companies that have most of their
revenues in foreign currencies.
Despite the difficult market environment in 2025, Icelandair delivered record revenue. Icelandair carried over 5 million
passengers for the first time, up by 8% year-on-year. During the year, 34% of passengers traveled to Iceland, 18% from
Iceland, 43% were connecting passengers, and 5% traveled within Iceland. The growth between years was primarily driven
by a strong increase in traffic to and from Iceland, with passenger numbers rising by 14% and 16%, respectively. These results
highlight the flexibility of the route network in responding to changing market conditions. Icelandair had an outstanding on-time
performance of 83% during the year, thanks to the fantastic teamwork among Icelandair employees. Costs were adversely
affected by the weakening of the USD against other currencies, particularly the ISK, salary increases, a spike in carbon
related cost, and inflationary pressures in parts of the value chain.
Icelandair's transformation journey, launched in 2024, is progressing well. The program focuses on driving efficiency, reducing
costs, and unlocking new revenue opportunities. To date, over 500 initiatives have been identified, with 233 implemented by
year-end 2025. When fully realized, these actions are expected to generate more than USD 100 million in annual impact. The
program delivered an actual impact of around USD 70 million in 2025. One result of
the program is reflected in improved labor efficiency with fewer FTEs during the year despite more capacity than last
year. Icelandair employed an average of 3,520 full-time employees in 2025, which was 55 fewer than in 2024. The cargo
operation continued to show improvement, and the leasing business delivered strong results, which contributed positively to
the overall performance.
Equity amounted to USD 286.4 million, with an equity ratio of 15% at year-end. The total liquidity position is strong, with cash
and marketable securities amounting to USD 365.8 million and USD 92 million in form of committed undrawn revolving
facilities.
The Company expects profitability to improve in 2026. Full-year capacity is planned to grow by 2% with a focus on off-peak
seasons. Unit revenue development is expected to outpace unit cost development, driving improved margins. Profitability for
the Leasing and Cargo segments is projected to remain similar to that in 2025.
Endorsement and Statement by the Board of Directors and the CEO, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 3
Share capital and Articles of Association
The nominal value of Icelandair Group’s issued share capital at year-end was ISK 41.1 billion. The share capital is divided into
an equal number of shares with a nominal value of one ISK each. The shares are listed on the Main Market of the Nasdaq
Iceland stock exchange under the ticker symbol ICEAIR in a single class bearing equal rights. The Company has entered
various agreements that include "Change of control" clauses which might be triggered if any person or group of persons acting
in convert gains direct or indirect control of the Company and/or if the Company’s shares cease to be listed on a stock
exchange.
According to the Icelandic Company's Act, companies can acquire and hold up to 10% of the nominal value of issued shares.
On 7 March 2024 the Annual General Meeting authorized the set-up of a formal buy-back program in accordance with the
provisions of Article 5 of MAR (Regulation (EU) No 596/2014 of the European Parliament and of the Council), which has been
transposed into Icelandic legislation with Act No 60/2021, as well as the provisions of the Commission Delegated Regulation
(EU) 2016/1052 which contains regulatory technical standards for the conditions applicable to buy-back programs. Under the
program the Company was authorized to purchase up to 10% of its own shares in accordance with Article 55 of the Icelandic
Companies Act No 2/1995 during a period of 18 months following the Annual General Meeting. No buy-back of shares was
undertaken in 2025 and the Company held no treasury shares at year-end.
The Annual General Meeting further authorized an incremental share capital increase of up to ISK 900,000,000 nominal value
that may only be utilized to fulfil terms under stock option agreements granted pursuant to the Company’s Share-Based
Incentive Program approved by the meeting. Existing shareholders will not have pre-emptive subscription rights to shares
issued pursuant to this provision. Share price and subscriptions shall be in accordance with the Share Based Incentive
Program and stock option agreements entered pursuant to that. The authorization is valid until 31 December 2030. In February
2025, a total of 486,600,000 stock options were granted based on the program. At year-end total outstanding stock options
numbered 1,265,200. See note 26.
The Company's Board of Directors comprises five members, two women and three men. The gender ratio is thus in accordance
with Icelandic laws requiring companies with over 50 employees to ensure that the Board has representation from both genders
and that each gender comprises at least 40% of the Board Members when Board Members surpass three. The Board Members
are elected at the Annual General Meeting each for a term of one year. Those persons willing to stand for election must give
formal notice thereof to the Board of Directors and Icelandair Group's Nomination Committee at least seven days before the
Annual General Meeting.
The Company's Articles of Association may only be amended at a legitimate shareholders’ meeting, provided that amendments
and their main aspects are clearly stated in the invitation to the meeting. A resolution will only be passed if it is approved by at
least 2/3 of votes cast as well as by shareholders controlling at least 2/3 of the share capital represented at the respective
shareholders' meeting.
The number of shareholders at year-end 2025 was 13,213, a decrease of 755 during the year. At 31 December 2025 the 10
largest shareholders were:
Further information on matters related to share capital is disclosed in note 26. Additional information on shareholders is
provided on the Company's website www.icelandairgroup.com.
Shares in ISK
Shares
Name
thousand
in %
7,073,868
17.20
1,956,169
4.76
1,532,443
3.73
1,486,423
3.61
1,161,283
2.82
998,984
2.43
978,899
2.38
978,655
2.38
832,461
2.02
715,849
1.74
17,715,034 43.08
23,405,213 56.92
41,120,247 100.00
Other shareholders ......................................................................................
Stefnir hf. .....................................................................................................
Landsbréf hf. ...............................................................................................
Almenni-Lífsverk lífeyrissjóður ....................................................................
Brú Lífeyrissjóður starfsmanna sveitarfélaga ..............................................
Birta lífeyrissjóður ........................................................................................
Arion banki hf. .............................................................................................
Vanguard .....................................................................................................
Gildi - lífeyrissjóður ......................................................................................
Lífeyrissjóður starfsmanna ríkisins ..............................................................
Blue Issuer Designated Activity Company ..................................................
Endorsement and Statement by the Board of Directors and the CEO, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 4
Corporate Governance
The Group's management is of the opinion that practicing good Corporate Governance is vital for the existence of the Group
and in the best interests of shareholders, Group companies, employees and other stakeholders and will in the long run produce
satisfactory returns on shareholders' investment. Corporate Governance exercised within Icelandair Group hf. ensures sound
and effective control of the Company's affairs and highly ethical business practices.
The Board of Directors has prepared a Corporate Governance Statement in compliance with the Icelandic Corporate
Governance guidelines which are described in full in the Corporate Governance Statement that form an appendix to the
Consolidated Financial Statements on page 50. It is the opinion of the Board of Directors that Icelandair Group hf. complies
with the Icelandic guidelines for Corporate Governance.
Information on matters related to financial risk management is disclosed in note 33. Information regarding operational risk
management is disclosed in the Operational Risk appendix.
Non-Financial Reporting
According to the Icelandic Financial Statements Act, the Company has compiled a thorough overview of non-financial
information. To prepare for the EU Corporate Sustainability Reporting Directive (CSRD), the sustainability statement has been
developed by considering the European Sustainability Reporting Standards (ESRS), which outline requirements for corporate
reporting on a broad range of sustainability matters.
The Company’s sustainability data is presented in accordance with the Nasdaq's ESG Reporting Guide 2.0 (Environment,
Society and Governance) at the end of the sustainability statement. The Company's material matters, policies, goals and
progress are further discussed in the Non-financial Reporting that forms an appendix to the Consolidated Financial Statements
on page 56.
Statement by the Board of Directors and the CEO
The Consolidated Financial Statements for the year ended 31 December 2025 have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the EU and additional Icelandic disclosure requirements
for financial statements of listed companies.
In our opinion, the Consolidated Financial Statements of Icelandair Group hf. for the year 2025 identified as
“549300UMI5MBLZSXGL15-2025-12-31-en.xbri” are in all material respects prepared in compliance with the ESEF
Regulation.
According to our best knowledge it is our opinion that the annual Consolidated Financial Statements give a true and fair view
of the consolidated financial performance of the Group for the year 2025, its assets, liabilities and consolidated financial
position as at 31 December 2025 and its Consolidated Cash Flows for the year 2025.
Further, in our opinion, the Consolidated Financial Statements and the endorsement of the Board of Directors and the CEO
give a fair view of the development and performance of the Group's operations and its position and describe the principal risks
and uncertainties faced by the Group.
The Board of Directors and the CEO have today discussed the Consolidated Financial Statements of Icelandair Group hf. for
the year 2025 and confirm them by means of their signatures. The Board of Directors and the CEO recommend that the
Consolidated Financial Statements will be approved at the Annual General Meeting of Icelandair Group hf.
Reykjavík, 5 February 2026
Board of Directors:
CEO:
Consolidated Financial Statements of Icelandair Group hf. 2025 5
Independent Auditor’s Report
To the Board of Directors and Shareholders of Icelandair Group hf.
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Icelandair Group hf. ("the Company"), which comprise the
consolidated statement of financial position as at 31 December 2025, the consolidated statements of profit or loss and other
comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising material accounting
policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial
position of the Company as at 31 December 2025, and of its consolidated financial performance and its consolidated cash
flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the
European Union and additional disclosure requirements for listed companies in Iceland.
Our opinion is consistent with the additional report submitted to the Audit Committee and the Board of Directors.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section
of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to audits of
the consolidated financial statements of public interest entities in Iceland and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
We declare, to the best of our knowledge and belief, that we have not provided any prohibited non-audit services, as referred
to in Article 5(1) of the Regulation (EU) 537/2014 and that we remained independent in conducting the audit.
We were first appointed as auditors of Icelandair Group hf. when it was founded in 2005. We have been re-appointed by
resolutions passed by the annual general meeting uninterrupted since then.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Independent Auditor's Report, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 6
The Audit
Passenger revenue recognition
Our audit procedures were designed to evaluate the
timing and accuracy of passenger revenue recognition.
These procedures include inspecting the controls over
the Group's systems which govern the passenger ticket
sales. We evaluated the design of controls to assess if
they were likely to ensure the accuracy and timing of the
revenue recognition of passenger income and tested
operating effectiveness of selected controls.
We inspected reconciliation between the revenue
accounting system and the financial system. We tested
selected manual journal entires posted in passenger
revenue accounts.
We used data analytics to correlate the transactions in
passenger revenue to confirm appropriate counter
postings. We also analysed passenger revenue and
used external and internal information to set
expectations which were compared to recognized
revenue.
We evaluated the methodology applied to deferred
income and assessed the appropriateness. We tested
the inputs and challenged key assumptions in the
deferred income obligation and reperformed calculations
of the obligation.
We tested the timing of passenger revenue in the
appropriate period by testing selected flights before and
after the the reporting date.
Reference is made to note 7 "Operating income” and
32 “Deferred income”.
Passenger ticket sale is presented as deferred
income in the consolidated statement of financial
position until transportation has been provided and at
that time the sale is recognised as revenue. Large
volumes of transactions flow through various IT
systems from the date of sale until revenue is
recognized in the consolidated income statement.
The recording process is complex which gives rise to
a risk of error in determining the amount and timing
of the revenue recognition. Timing and accuracy in
the recording of passenger income is therefore one
of the key audit matters of our audit of the
consolidated financial statements.
Provision for scheduled aircraft engine
maintenance of leased engines and amortization
of owned engines
We read new purchase and lease agreements for
engines in the year 2025 and evaluated if accounting for
new engines was appropriate and initial recognition is in
line with agreements.
We assessed the appropriateness of management's key
assumptions which included assessing the estimated
cost of overhaul, estimated future utilisation and
expected maintenance intervals.
We selected a sample of additions during the year and
inspected relevant invoices.
We recalculated the estimated provision for leased
engines and amortization for owned engines as well as
confirming usage of each engine during the year.
Assessed whether past estimates have been historically
accurate by comparing budgeted and actual cost of the
most recent maintenance of engines.
Reference is made to note 12 “Operating assets”
and note 30 “Provisions and other liabilities”.
The Group operates aircraft engines which are
owned or held under lease arrangements.
For own engines the maintenance cost is capitalized
and expensed over the estimated useful life of the
engine until it needs to undergo maintenence.
Maintenance provision for leased engines is
estimated by performing calculations which are
based on estimated cost of maintenance and an
estimated timetable of required checks.
These aspects require significant judgements by
Management when evaluating estimated aircraft
engine utilisation hours, expected maintenance
intervals and future maintenance costs which has led
us to consider this area as one of the most relevant
aspects of the audit.
Key Audit Matters
Independent Auditor's Report, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 7
Other information
The Board of Directors and CEO are responsible for the other information. The other information comprises the information
included in the annual report, but does not include the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other information, we are required to report that fact. The annual
report is not available at our reporting date but is expected to be made available to us after that date.
Responsibilities of the Board of Directors and CEO for the Consolidated Financial Statements
The Board of Directors and CEO are responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRSs as adopted by the European Union and additional disclosure requirements for listed
companies in Iceland, and for such internal control as they determine is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors and CEO are responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors and CEO are responsible for overseeing the Company’s financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of
the entities or business units within the group as a basis for forming an opinion on the group financial statements.
We are responsible for the direction, supervision and review of the audit work performed for purposes of the group
audit. We remain solely responsible for our audit opinion.
Independent Auditor's Report, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 8
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements, contd.
We communicate with The Board of Directors and audit committee regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide The Board of Directors and audit committee with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with The Board of Directors and audit committee, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter
or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
Report on European single electronic format (ESEF Regulation)
As part of our audit of the consolidated financial statements of Icelandair Group hf. we performed procedures to be able to
issue an opinion on whether the consolidated financial statements of Icelandair Group hf. for the year 2025 with the file name
“549300UMI5MBLZSXGL15-2025-12-31-en.xbri” is prepared, in all material respects, in compliance with the Act on disclosure
obligation of issuers of securities and the obligation to flag no. 20/2021 relating to requirements regarding European single
electronic format Regulation EU 2019/815 which include requirements related to the preparation of the consolidated financial
statements in XHTML format and iXBRL markup.
Board of Directors and CEO are responsible for preparing the consolidated financial statements in compliance with the Act
on disclosure obligation of issuers of securities and the obligation to flag no. 20/2021. This includes preparing the
consolidated financial statements in an XHTML format in accordance with EU Regulation 2019/815 on the European single
electronic format (ESEF Regulation).
Our responsibility is to obtain reasonable assurance, based on evidence that we have obtained, on whether the consolidated
financial statements are prepared in all material respects, in compliance with the ESEF Regulation, and to issue a report that
includes our opinion. The nature, timing and extent of procedures selected depend on the auditor's judgement, including the
assessment of the risks of material departures from the requirement set out in the ESEF Regulation, whether due to fraud or
error.
In our opinion, the consolidated financial statements of Icelandair Group hf. for the year 2025 with the file name
“549300UMI5MBLZSXGL15-2025-12-31-en.xbri” is prepared, in all material respects, in compliance with the ESEF
Regulation.
Report on the report of the Board of Directors and CEO
Pursuant to the legal requirement under Article 104, Paragraph 2 of the Icelandic Financial Statements Act No. 3/2006, we
confirm that, to the best of our knowledge, the report of the Board of Directors and CEO accompanying the consolidated
financial statements includes the information required by the Financial Statements Act if not disclosed elsewhere in the
consolidated financial statements.
The engagement partner on the audit resulting in this independent auditor’s report is Sigríður Soffía Sigurðardóttir.
Reykjavík, 5 February 2026
KPMG ehf.
Consolidated Financial Statements of Icelandair Group hf. 2025 9 Amounts are in USD thousands
Consolidated Income Statement and other Comprehensive Income
for the year 2025
Notes 2025 2024
Operating income
7
7
Operating expenses
8 1,584,312 1,430,751
Operating profit before depreciation and amortization (EBITDA)
..................................................................................................
10
(
(
Operating loss (EBIT)
...........................................................................................................................................
(
(
(
(
11
(
(
19
21
(
(
Other comprehensive income (loss)
Items that are or may be reclassified to profit or loss
(
33 5,369 854 )(
33 11,014 )( 8,797
(
(
(
Total Comprehensive profit (loss) attributable to:
(
(
Earnings per share
27
(
(
The notes on pages 13 to 48 are an integral part of these Consolidated Financial Statements.
Finance income ................................................................................................
Finance cost .....................................................................................................
Share of gain of associates ..............................................................................
Net finance cost
....................................................................................................................................................................................
Passenger revenue ..........................................................................................
Leasing revenue ...............................................................................................
Other operating revenue ..................................................................................
Salaries and salary-related expenses ..............................................................
Other aviation expenses ..................................................................................
Depreciation and amortization .........................................................................
Cargo revenue .................................................................................................
Aircraft fuel .......................................................................................................
Other operating expenses ................................................................................
Owners of the Company ...................................................................................
Non-controlling interests ..................................................................................
Total comprehensive income (loss) for the year
...........................................................................
Basic and diluted earnings per share in US cent .............................................
Loss for the year
...........................................................................................................................
Income tax ........................................................................................................
Loss before tax (EBT)
......................................................................................................................................................................
Non-controlling interests ..................................................................................
Loss for the year
...........................................................................................................................
Currency translation differences ......................................................................
Total comprehensive profit (loss) for the year
...........................................................................
Other comprehensive income for the year
...........................................................................
Net profit (loss) on hedge of investment, net of tax ..........................................
Owners of the Company ...................................................................................
Cash flow hedges - effective portion of changes in fair value, net of tax .........
Cash flow hedges - reclassified to profit or loss ...............................................
Consolidated Financial Statements of Icelandair Group hf. 2025 10 Amounts are in USD thousands
Consolidated Statement of Financial Position
as at 31 December 2025
Notes 2025 2024
Assets
Reclassified*
Operating assets ..........................................................................................
12,15
Right-of-use assets ......................................................................................
16
Intangible assets and goodwill .....................................................................
17,18
Investments in associates ............................................................................
19
Receivables and deposits ............................................................................
20
Deferred tax assets ......................................................................................
21
Non-current assets 1,286,959 1,194,339
Inventories ....................................................................................................
22
Derivatives used for hedging ........................................................................
33
Trade and other receivables* .......................................................................
24
Marketable securities ....................................................................................
23
Cash and cash equivalents ..........................................................................
25
Current assets 576,775 462,380
Total assets
Equity
Share capital ................................................................................................
Reserves ......................................................................................................
Accumulated deficit ......................................................................................
(
(
Equity attributable to equity holders of the Company
26
Non-controlling interests ...............................................................................
Total equity
Liabilities
Loans and borrowings ..................................................................................
28
Lease liabilities .............................................................................................
29
Provisions and other liabilities ......................................................................
30
Non-current liabilities 746,622 663,058
Loans and borrowings ..................................................................................
28
Lease liabilities ............................................................................................. 29 77,987 66,302
Derivatives used for hedging ........................................................................ 33 3,570 5,615
Trade and other payables* ........................................................................... 31 318,712 260,056
Deferred income ..........................................................................................
32
Current liabilities 830,690 724,594
Total liabilities 1,577,312 1,387,652
Total equity and liabilities
The notes on pages 13 to 48 are an integral part of these Consolidated Financial Statements.
*Comparative information has been reclassified. See note 2c.
Consolidated Financial Statements of Icelandair Group hf. 2025 11 Amounts are in USD thousands
Consolidated Statement of Changes in Equity
for the year 2025
Non-
Share
Hedging
Translation
Other
Accumulated
controlling
Total
capital
reserve
reserve
reserves
deficit
Total
interest
equity
2024
(
(
(
(
2025
(
(
(
(
(
(
(
(
The notes on pages 13 to 48 are an integral part of these Consolidated Financial Statements.
Equity 31 December 2025 .....................................
and associates ..................................................
Shares issued ........................................................
Effects of profit or loss of subsidiaries
Stock options .........................................................
Currency translation differences ............................
Profit on hedge of investment, net of tax ...............
of cash flow hedges, net of tax ...........................
Cash flow hedges, reclassified to profit or loss .....
Effective portion of changes in fair value
Loss for the year ....................................................
Attributable to equity holders of the Company
Reserves
Effective portion of changes in fair value
of cash flow hedges, net of tax ...........................
Equity 1 January 2024 ...........................................
Loss for the year ....................................................
Currency translation differences ............................
Loss on hedge of investment, net of tax ................
Effects of profit or loss of subsidiaries
Equity 31 December 2024 .....................................
Equity 1 January 2025 ...........................................
Cash flow hedges, reclassified to profit or loss .....
Stock options .........................................................
and associates ..................................................
Consolidated Financial Statements of Icelandair Group hf. 2025 12 Amounts are in USD thousands
Consolidated Statement of Cash Flows
for the year 2025
Notes
2025
2024
Cash flows from (to) operating activities
Reclassified*
Adjustments for:
10 173,813 154,067
11
19
(
(
21
(
(
Changes in:
22 525 )( 2,486
24 3,009 42,983 )(
31 66,445 37,516
Cash generated from operating activities 108,512 30,836
Net cash from operating activities 305,012 221,157
Cash flows from (to) investing activities
Acquisition of operating assets ..........................................................
12
(
(
Proceeds from sale of operating assets ............................................. 15,671 4,559
Acquisition of intangible assets .......................................................... 17 2,726 )( 1,593 )(
Deferred cost, change ........................................................................
(
(
Received dividend from associates ................................................... 1,697 212
Non-current receivables, change ....................................................... 1,561 )( 13,725 )(
Marketable securities, change ........................................................... 65,807 )( 33,554 )(
Net cash used in investing activities 177,801 )( 164,797 )(
Cash flows from (to) financing activities
Shares issued .................................................................................... 26 900 0
Proceeds from loans and borrowings ................................................ 28 19,438 0
Repayment of loans and borrowings .................................................. 28 53,693 )( 44,978 )(
Repayment of lease liabilities ............................................................ 29 72,348 )( 60,412 )(
Net cash used in financing activities 105,703 )( 105,390 )(
Change in cash and cash equivalents
...............................................................................................
Effect of exchange rate fluctuations on cash equivalents held
......................................................................
Cash and cash equivalents at beginning of the year
...................................................................................
Cash and cash equivalents at 31 December
.............................................................................................
25 195,466 150,235
Marketable securities ....................................................................................
Cash, cash equivalents and marketable securities at 31 December
..........
The notes on pages 13 to 48 are an integral part of these Consolidated Financial Statements.
See Note 40 for details of investment and financing activities that do not affect cash flows.
*Comparative information has been reclassified. See note 2c.
Inventories ................................................................................................
Share in profit of associates .....................................................................
Income tax ................................................................................................
Loss for the year ..........................................................................................
Expensed deferred cost ............................................................................
Gain on sale of operating assets ..............................................................
Net finance cost ........................................................................................
Depreciation and amortization ..................................................................
Trade and other receivables .....................................................................
Trade and other payables .........................................................................
Deferred income .......................................................................................
Interest paid ..............................................................................................
Interest received .......................................................................................
Consolidated Financial Statements of Icelandair Group hf. 2025 13 Amounts are in USD thousands
Notes
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 14 Amounts are in USD thousands
4. Use of estimates and judgements, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 15 Amounts are in USD thousands
6. Operating segments, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 16 Amounts are in USD thousands
6. Operating segments, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 17 Amounts are in USD thousands
8. Operating expenses, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 18 Amounts are in USD thousands
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 19 Amounts are in USD thousands
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 20 Amounts are in USD thousands
17. Intangible assets and goodwill, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 21 Amounts are in USD thousands
18. Impairment test, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 22 Amounts are in USD thousands
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 23 Amounts are in USD thousands
21. Income taxes, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 24 Amounts are in USD thousands
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 25 Amounts are in USD thousands
26. Equity, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 26 Amounts are in USD thousands
28. Loans and borrowings, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 27 Amounts are in USD thousands
28. Loans and borrowings, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 28 Amounts are in USD thousands
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 29 Amounts are in USD thousands
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 30 Amounts are in USD thousands
33. Financial risk management, contd.
a. Credit risk, contd.
Trade and other receivables and marketable securities, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 31 Amounts are in USD thousands
33. Financial risk management, contd.
b. Liquidity risk, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 32 Amounts are in USD thousands
33. Financial risk management, contd.
c. Market risk, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 33 Amounts are in USD thousands
33. Financial risk management, contd.
c. Market risk, contd.
Fuel risk, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 34 Amounts are in USD thousands
33. Financial risk management, contd.
c. Market risk, contd.
Exposure to currency risk, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 35 Amounts are in USD thousands
33. Financial risk management, contd.
c. Market risk, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 36 Amounts are in USD thousands
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 37 Amounts are in USD thousands
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 38 Amounts are in USD thousands
36. Related parties, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 39 Amounts are in USD thousands
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 40 Amounts are in USD thousands
41. Significant accounting policies, contd.
b. Currency exchange, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 41 Amounts are in USD thousands
41. Significant accounting policies, contd.
e. Leases, contd.
As a lessee, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 42 Amounts are in USD thousands
41. Significant accounting policies, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 43 Amounts are in USD thousands
41. Significant accounting policies, contd.
h. Operating assets, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 44 Amounts are in USD thousands
41. Significant accounting policies, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 45 Amounts are in USD thousands
41. Significant accounting policies, contd.
k. Financial instruments, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 46 Amounts are in USD thousands
41. Significant accounting policies, contd.
l. Carbon-related assets and obligations, contd.
Carbon-related assets and liabilities, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 47 Amounts are in USD thousands
41. Significant accounting policies, contd.
n. Impairment, contd.
Non-financial assets, contd.
Notes, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 48 Amounts are in USD thousands
41. Significant accounting policies, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 49 Amounts are in USD thousands
Corporate Governance Statement
The framework
The Guidelines on Corporate Governance, 6th edition issued on 21 July 2021, by the Iceland Chamber of Commerce,
Nasdaq Iceland, and the Confederation of Icelandic Employers, along with the Company's Articles of Association, the Rules
for Issuers of securities listed on the Nasdaq Iceland and policies and procedures approved by the Board, make up the
framework for Icelandair Group's, hereafter Icelandair, Corporate Governance practices. The Company's Articles of
Association are accessible on the Company's website. The Guidelines on Corporate Governance are accessible on the
website www.leidbeiningar.is and the guidelines and the Rules for Issuers are available on the website of Nasdaq Iceland.
Icelandair was recognized for Excellence in Corporate Governance in 2025, an acknowledgement granted by the Icelandic
Chamber of Commerce, Nasdaq Iceland, and the Confederation of Icelandic Employers. The acknowledgement certifies
that the working practices of the Company's Board of Directors are well organized, and that the implementation of the
Board's duties is exemplary. The recognition is based on an assessment of Icelandair's governance practices that are
evaluated based on the Guidelines on Corporate Governance. Stjórnvísi (e. Excellence Iceland) is the coordinator of the
recognition process.
In all main respects there are detailed rules of procedure in place, including for the Nomination Committee. In the
Company’s Articles of Association it is specified that two female candidates and the male candidates that receive the most
votes and the person who receives the most votes after the aforementioned in the election of board members shall
be deemed as the rightfully elected board members. In its work, the Nomination Committee also considers the combination
of the Board in terms of education, professional background, gender, knowledge, experience, and skills. The Company
has a goal to ensure that there is never more than 60% of one gender in management positions. The ratio of women at
the Executive Management and Director levels was 41% at year-end 2025.
Composition and activities of the Board of Directors and sub-committees
Internal controls
Internal controls are applied at various levels to minimize the risk of fraud, abuse of funds and to achieve operational,
reporting and compliance objectives. The management establishes appropriate internal control, with Board oversight, and
holds individuals accountable for their responsibilities in the pursuit of objectives. Directors are responsible for identifying,
assessing, and mitigating risks associated with the operations of their respective divisions. The Company has a Risk
governance framework in place which includes a centralized enterprise risk platform that is coordinated by Risk
Management and overseen by the Risk Committee. Icelandair has identified risks in the financial and accounting processes
and selected and developed control activities to mitigate those risks.
The oversight of compliance with the Company's Risk Management Policies and procedures resides with the Board's Audit
Committee. Enterprise risk is monitored through bi-annual risk assessments that are reported to the Board of Directors.
Regular and ad hoc reviews of risk management controls and procedures are a part of the Company's working procedures,
the results of which are reported to the Audit Committee. The Committee oversees the annual financial statements of the
Company and the Group's consolidated financial statements including non-financial information as well as the Company's
annual report. The Committee is responsible for the evaluation of the independence and the eligibility of both the
Company's external auditor and auditing firm. The Committee shall make suggestions to the Board of Directors regarding
the selection of the Company's auditor. The Audit Committee held four meetings in 2025.
Health &
Board of
Audit
Remuneration
Nomination
Safety
Directors
Committee
Committee
Committee
Committee
12 4 3 5 5
Chairm. Chairm.
Vice chairm. Member Member
Member Member
Member Member Chairm.
Member Member
Chairm.
Chairm.
Member
Member
Georg Lúðvíksson ..................................
No. of meetings in 2025 .........................
Guðmundur Hafsteinsson ......................
Nina Jonsson .........................................
Svafa Grönfeldt ......................................
John F. Thomas .....................................
Matthew Evans ......................................
Auður Þórisdóttir ....................................
Árni Gunnarsson ....................................
Alda Sigurðardóttir .................................
Corporate Governance Statement, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 50 Amounts are in USD thousands
Internal controls, contd.
Audit Committee members:
Auður Þórisdóttir, Chairman
John F. Thomas
Svafa Grönfeldt
Values, Code of Ethics and Corporate Responsibility
The Company's values are:
Passion
Simplicity
Responsibility
On 25 May 2009 the Board of Directors approved a Code of Ethics which was amended on 5 January 2011 and 18
November 2016. The Code of Ethics is accessible to all Company employees through the Company's intranet, MyWork
and on the Icelandair Group website.
Remuneration Committee
The purpose of the Remuneration Committee is to maintain oversight of the remuneration of the Executive Committee and
senior management as well as to ensure that the structure of the compensation package is aligned with the long-term
interests of shareholders.
The main tasks of the Remuneration Committee are to prepare the decision-making process of the Board with regards to
the Remuneration Policy, including the determination of any performance-related variable compensation, and setting the
terms and conditions for remuneration for the CEO. The Remuneration Committee is also assigned to regularly review the
remuneration policy and ensure its adherence.
The Remuneration Committee further oversees the overall long-term development of remuneration and human resource
matters to ensure that all remuneration practices are in accordance with laws, regulations, and overall best practices.
Furthermore, the Remuneration Committee seeks to formulate a point of view on any risks – operational, financial, or
otherwise – and if and how they may affect the organization.
The Remuneration Committee inquiries about the results and outcomes of established human resource policies and
procedures on a regular basis.
The objective of the Remuneration Policy is to make employment within Icelandair and its subsidiaries an attractive option
for highly skilled employees and thereby secure the Company's position as a leading company in its field. Pursuant to said
objective, the Company must be able to offer competitive salaries and other variable forms of payment, such as short-term
cash incentives and equity-related long-term incentives.
Icelandair has a short-term incentive program in place for the senior leadership team based on a proposal from the
Remuneration Committee which has been approved by the Board of Directors.
The purpose of the program is to align the interests of the management and shareholders and mobilize the Company’s
leadership to focus on the overall performance – both financial objectives and the execution of the Group's strategy. The
program is designed to encourage the management to increase shareholder value and reward operational performance,
proper management, and professional conduct. Performance outcomes are determined by a mixture of financial, strategic,
and operational measures which take into account the participant's role. Performance pay-outs based on this short-term
incentive program are annual and capped at 25% of annual base salary.
Any compensation to the management under the short-term incentive program is based on the sole discretion of the
Remuneration Committee considering the factors above.
At the Company's Annual General Meeting in 2022 and 2024it was approved to implement a share-based incentive
program for the senior leadership team and other selected key employees. In 2025, 486,600,000 stock options were
granted based on the program, thereof 140,600,000 to the Executive Team.
Corporate Governance Statement, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 51 Amounts are in USD thousands
Remuneration Committee, contd.
General Salary Development
Icelandair operates within a highly regulated and unionized international airline and aviation sector, and its organizational
structure reflects these industry standards. Consequently, approximately 80% of Icelandair’s workforce is employed under
collective bargaining agreements, adjusted for seasonal variations, while the remaining employees’ terms are influenced
by broader market trends. The company maintains continuous, year-round operations, facing significant seasonal
fluctuations and utilizing a hub-and-spoke model, which presents ongoing challenges for optimal staff allocation and
efficiency. These factors directly impact the formulation and evolution of wage agreements for both ground operations and
office personnel.
CEO Remuneration
According to Icelandair’s Remuneration Policy, the remuneration package for the President and CEO is comprised of a
fixed and variable salary component and needs to be competitive with other CEO's of publicly traded companies in the
Icelandic stock market as well as other airlines in the same markets. In addition, the terms of employment of the President
and CEO shall consider the financial and operating results of the Company from time to time.
As stated above, the variable remuneration of the President and CEO is an integral part of the overall Executive Committee
remuneration policy which is linked to predetermined and quantifiable performance measures and are reviewed and
approved by the Remuneration Committee and the Board each fiscal year. The Remuneration Committee typically reviews
the President & CEO's performance measures and makes a proposal to the Board of Directors for appropriate changes to
reflect a strategic or tactical directional change for the Group from time to time.
Board of Directors Remuneration
Members of the Board of Directors shall be paid a monthly remuneration in accordance with the decision of the Annual
General Meeting each year, as provided in Article 79 of the Companies Act No. 2/1995. The Board of Directors will submit
a proposal concerning the remuneration for the upcoming year of operation, considering the extent of responsibilities, time
commitment and the results of the Company. Board Members shall not enjoy shares, options to buy or sell, stock options
or other types of payments linked to the share price or performance of the Company.
The Remuneration Committee held three meetings in 2025.
Remuneration Committee members:
Guðmundur Hafsteinsson, Chairman
Nina Jonsson
Matthew Evans
Nomination Committee
Icelandair Group has a Nomination Committee which has an advisory role in the selection of members of the Board of
Directors. The Committee presents its proposal to the Annual General Meeting or other Shareholders' meetings where
elections to the Board of Directors is on the agenda.
The Nomination Committee shall put forward its rationalized opinion concurrently with the notification of the AGM or as
soon as possible in conjunction with other shareholder meetings. The Committee's opinion shall be made available to
shareholders in the same way as other proposals to be submitted to the meeting. The Committee operates according to
Rules of Procedures which are set up by the Committee itself and approved by the Board of Directors. The Nomination
Committee shall review its Rules of Procedure as needed and have any changes approved by the Board of Directors.
The Nomination Committee consists of three members. The Shareholders' meeting elects two members, one man and one
woman, which are nominated by shareholders. Subsequently, the Board of Directors appoints one member who cannot
also be a member of the Board of Directors.
All members shall be independent of the Company and its executives. The member appointed by the Board of Directors
shall be independent of the Company's largest shareholders. The same criteria shall apply to the assessment of the
independence of Committee members as to the assessment of the independence of Board Members according to The
Guidelines on Corporate Governance issued by the Iceland Chamber of Commerce, the Confederation of Icelandic
Employers and Nasdaq Iceland. The Nomination Committee held five meetings in 2025.
Corporate Governance Statement, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 52 Amounts are in USD thousands
Nomination Committee, contd.
Nomination Committee members:
Árni Gunnarsson, Chairman (appointed by the Board of Directors)
Alda Sigurðardóttir
Georg Lúðvíksson
Health & Safety Committee
The purpose of the Health & Safety Committee is to maintain oversight of the development and implementation of
Icelandair's Health and Safety Policies and initiatives. In addition, the Committee serves as a forum for in-depth discussions
on Icelandair’s safety matters and relevant considerations to health and risk mitigation strategies. At the start of its term,
the Board of Directors selects up to two of its members to serve on the Health & Safety Committee.
The Health & Safety Committee has extensive knowledge and experience of airline safety matters in addition to a strong
background within the industry. As a result, it can provide valuable support to the organization on health and safety topics.
All quarterly Board of Directors meetings include a ten-minute safety review. The Committee held five meetings in 2025.
Health & Safety Committee members:
John F. Thomas, Chairman
Nina Jonsson
The Board of Directors
At the Annual General Meeting of Icelandair Group, held on 12 March 2025, the following were elected members of the
Board of Directors; Guðmundur Hafsteinsson, John F. Thomas, Matthew Evans, Nina Jonsson and Svafa Grönfeldt.
Guðmundur Hafsteinsson was elected as the Chairman of the Board.
Gudmundur Hafsteinsson, Chairman
Guðmundur joined the Board of Icelandair Group on 8 March 2018. He is born in 1975 and is an Icelandic and U.S. citizen.
Guðmundur is independent of the Company, its management and significant shareholders and holds 8,555,555 shares.
John F. Thomas
John joined the Board of Icelandair Group on 6 March 2020. He is born in 1959 and is an Australian and U.S. citizen. John
is independent of the Company and holds 3,394,500 shares.
Matthew Evans
Matthew joined the Board of Icelandair Group on 23 July 2021. He is born in 1986 and is a U.S. citizen. Matthew is
independent of the Company and its management. However, he serves on the Board as the representative of the
Company’s largest shareholder and as such he is not independent from the Company’s major shareholders. He holds no
shares in the Company.
Nina Jonsson, Vice Chairman
Nina joined the Board of Icelandair Group on 6 March 2020. She is born in 1967 and is an Icelandic and U.S. citizen. Nina
is independent of the Company, its management and significant shareholders and holds no shares.
Svafa Grönfeldt
Svafa joined the Board of Icelandair Group on 8 March 2019. She is born in 1965 and is an Icelandic and U.S. citizen. Svafa
is independent of the Company, its management and significant shareholders and holds 12,500,000 shares.
Further information on the Board of Directors can be found on the Icelandair Group website.
Corporate Governance Statement, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 53 Amounts are in USD thousands
The Board of Directors, contd.
The Company's Board of Directors exercises supreme authority in the Company's affairs between shareholders' meetings,
and it is entrusted with the task of ensuring that the organization and activities of the Company's operation are in in correct
and proper order at all times.
The Board of Directors is instructed in the Company's Articles of Association to appoint a President and CEO for the
Company and decide the terms of his or her employment. The Board of Directors and President and CEO are responsible
for the management of the Company.
The Company's Board of Directors shall adopt working procedures in compliance with the Companies Act and must ensure
adequate supervision of the Company's accounts and the safeguarding of its assets. Only the Board of Directors may
assign powers of procuration on behalf of the Company. The signatures of the majority of members of the Board are
required to bind the Company. The President and CEO has charge of the day-to-day operation of the Company and is
required in his work to observe the policies and instructions set out by the Company's Board of Directors. Day-to-day
operation does not include measures which are unusual or extraordinary. Such measures can only be taken by the
President and CEO with specific authorization of the Board of Directors unless it is impossible to await the decision of the
Board without seriously disadvantaging the operation of the Company. In such instances, the President and CEO is
required to consult with the Chairman of the Board, if possible, after which the Board of Directors must immediately be
notified of the measures. The President and CEO shall ensure that the accounts and finances of the Company conform to
law and accepted practices and that all assets belonging to the Company are securely safeguarded. The President and
CEO is required to provide the members of the Board of Directors and Company auditors with any information pertaining
to the operation of the Company which they may request, as required by law.
The Company's Board of Directors consists of five members elected at the Annual General Meeting for a term of one year.
Those who intend to stand for election to the Board of Directors must inform the Board in writing of their intention at least
seven days before the AGM, or extraordinary shareholders’ meeting at which elections are scheduled. Only those who
have formally informed the Board of their candidacy are eligible.
The Board of Directors elects a Chairman and Vice Chairman from its members and otherwise allocates its obligations
among its members as needed. The Chairman calls Board meetings. A meeting must also be held if requested by a member
of the Board of Directors or the President and CEO. Meetings of the Board are valid if attended by a majority of its members.
However, important decisions shall not be made unless all members of the Board have an opportunity to discuss the matter,
if possible. The outcome of issues is decided by force of vote, and in the event of equal votes, the issue is deemed as
rejected. The President and CEO attends meetings of the Board of Directors, even if he or she is not a member of the
Board and has the right to participate in discussions and submit proposals unless otherwise decided by the Board in
individual cases. A book of Minutes is kept of proceedings at meetings and must be signed by participants in the meeting.
A Board member who disagrees with a decision made by the Board of Directors is entitled to have his or her dissenting
opinion entered in the book of Minutes. The same applies to the President and CEO. The Chairman is responsible for the
Board's relations with shareholders and shall inform the Board on their views.
The Rules of Procedures are accessible to the Board of Directors and the management through the Board's intranet, Admin
control. In accordance with article 14 of the Rules of Procedures the Board of Directors must annually evaluate its work,
size, composition, and practices, and must also evaluate the performance of the CEO and others responsible for the day-
to-day management of the Company and its development. The annual performance assessment is intended to improve
working methods and increase the efficiency of the Board. The assessment entails e.g., evaluation of the strengths and
weaknesses of the Board's work and practices and takes into consideration the work components which the Board believes
may be improved.
The Board of Directors elects the members of the Remuneration Committee and the Audit Committee. These sub-
committees adhere to the Rules of Procedures. The Nomination and Audit Committees have their own Rules of Procedures
which are approved by the Board. The Board of Directors convened twelve times during the year, and all Board Members
attended almost all meetings. All current members of the Board of Directors are independent from the Company. All Board
members were independent of the Company’s major shareholders in 2025 apart from Matthew Evans who represents the
largest shareholder.
Corporate Governance Statement, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 54 Amounts are in USD thousands
Executive committee
Bogi Nils Bogason, President & CEO
Bogi holds 23,625,000 shares and 72,100,000 share options and has no interests linked with the Company’s main clients,
competitors, or major shareholders. The eight other members of the Executive Committee hold a total of 271,100,000
share options.
Arnar Már Magnússon, Senior Vice President Flight Operations
Árni Hermannsson, Managing Director Loftleidir Icelandic
Elísabet Helgadóttir, Chief Human Resources Officer
Einar Már Guðmundsson, Managing Director Icelandair Cargo
Ívar S. Kristinsson, Chief Financial Officer
Leifur Guðmundsson, Senior Vice President Technical Operations
Rakel Óttarsdottir, Chief Digital Officer
Tómas Ingason, Chief Commercial Officer
The Executive Committee held 86 meetings in 2025. In September Sylvía Kristín Ólafsdóttir who held the position of Chief
Operating Officer left the Company. In October changes to the organizational structure were announced when Leifur
Guðmundsson took on the role of Senior Vice President of Technical Operations and Arnar Már Magnússon joined the
company as Senior Vice President Flight Operations and the position of COO was discontinued. The Committee now
consists of 9 members. Further information on the Executive Committee members can be found on the Icelandair Group
website
Consolidated Financial Statements of Icelandair Group hf. 2025 55 Amounts are in USD thousands
Non-Financial Reporting
General information
Basis for preparation
This section of the financial account represents the non-financial information (hereafter ‘Sustainability Statement’) of
Icelandair for the financial year 2025. The statement includes information on how the Company’s operations and value
chain interact with the environment and society – the impacts Icelandair has on people and the planet, and how
environmental and social developments can in turn affect the business. The statement also outlines the actions Icelandair
is taking to understand, manage and reduce these impacts over time. The scope of the Sustainability Statement is the
same as for the financial accounts and no subsidiaries are exempt from it.
In preparation for the EU Corporate Sustainability Reporting Directive (CSRD), which is expected to be implemented in
Iceland, the Sustainability Statement has been developed with reference to the European Sustainability Reporting
Standards (ESRS). During the transition period, Icelandair continues to report in accordance with the Nasdaq ESG
Reporting Guide 2.0. As a result, sustainability data is also presented in line with the Nasdaq ESG Reporting Guide 2.0
(Environment, Social and Governance) at the end of the Sustainability Statement. Icelandair supports the United Nations’
Sustainable Development Goals (SDGs) and has chosen four goals that represent the Company’s key sustainability focus
areas. These are Climate Action, Gender Equality, Responsible Consumption and Production, and Decent Work and
Economic Growth. Icelandair is also a signatory of the UN Global Compact, reinforcing its commitment to the Ten Principles
on human rights, labor, environment, and anti-corruption, and reports annually on the progress in accordance with the UN
Communications on Progress requirements.
Governance of sustainability matters
The role of the management and supervisory bodies
The Company’s governance structure is outlined in the Corporate Governance Statement, which includes information on
the composition of the Board of Directors.
The ultimate responsibility for sustainability matters lies with the Board of Directors, which oversees Icelandair’s
impacts, risks and opportunities in this area. The Board of Directors is informed quarterly on the progress by the
Sustainability team. The Audit Committee is responsible for risk management and internal control processes related to
sustainability reporting and is informed by the Sustainability team as needed on matters relevant to its responsibilities.
Members of the Executive Committee who are accountable for their respective ESG categories are responsible for the
implementation of sustainability initiatives within their areas of responsibility. They are expected to ensure that adequate
resources are in place, to oversee the setting of sustainability targets and monitor progress. The project owner within the
Sustainability team is responsible for keeping the Executive Committee updated on the sustainability priorities and the
progress of related initiatives before updating the Board of Directors. The Sustainability team consists of one project owner
who is the link to the Executive Committee and a project manager who drives most of the work, coordinates with different
functions, and engages with external and internal stakeholders. To ensure effective collaboration across the Company, the
Sustainability team works in close collaboration with departments responsible for respective ESG priorities.
ESG governance: Responsibilities:
Board of Directors
Audit Committee
Executive Committee
Sustainability team
Environment Social Governance
Climate
Economic prosperity
and societal impact
Holistic decision
making
Resource use Employees Procurement
Environmental
performance
Safety and well-being Ethical standards
Respective ESG priorities for business divisions
Board of Directors
Oversees the sustainability strategy and related policies.
Audit Committee
Responsible for risk management and internal control processes in relation
to the financial and sustainability reporting.
Executive Committee
Decides on strategic direction and is responsible for putting into action and
overseeing sustainability initiatives within their respective business
divisions.
Sustainability team
Responsible for initiating and driving projects, trendspotting and strategy
development as well as communication and reporting. Coordinates with
relevant business divisions, manages internal and external stakeholder
relationships.
Business divisions
Each ESG priority is owned by a designated business division, with certain
priorities managed cross-functionally. Business divisions are responsible
for project management, actions, improvements, data management and
target setting.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 56 Amounts are in USD thousands
Governance of sustainability matters, contd.
Statement on due diligence
Business model, value chain and strategy
Business model
Icelandair’s business is built on Iceland’s uniquely strategic location, with a route network that connects Europe, North
America, and beyond, supports four key markets, to, from, via and within, and is strengthened by cargo, leasing, and
consulting services that contribute to Iceland’s global connectivity, tourism development, and broader economic growth.
Supported by decades of commercial and operational expertise, a strong international brand, a commitment to
sustainability, and an exceptionally experienced team, Icelandair leverages its position as Iceland’s leading hub carrier to
ensure efficient operations, deliver customer value, and open new opportunities through modern, fuel-efficient aircraft.
Icelandair serves a diverse group of customers, both within the leisure and business segments, across its route network,
cargo and leasing operations. The business model of Icelandair has an impact on a variety of sustainability-related matters
across the Company’s operations and value chain and is exposed to various sustainability-related risks as well as
opportunities that can have positive or negative impacts on the Company.
Value chain
Icelandair's value chain reflects a network of upstream suppliers, downstream service providers and partners working
together to deliver seamless transportation services and generate value for stakeholders. The upstream value chain
includes suppliers and service providers essential to Icelandair’s operations, including aircraft manufacturers, fuel
suppliers, maintenance providers, airport facilities, and transport services for customers, freight and employees. These
critical inputs enable Icelandair to deliver core services, including passenger and cargo flights, leasing operations, airport
services, technical maintenance, and other supporting services.
As a result, the downstream activities include service providers at destinations, cargo facilities and services, and waste
and residuals management. Partners like travel agencies and cargo handlers play a vital role, alongside stakeholders who
benefit from economic and social impacts of Icelandair’s operations, such as tourism and other trade and export industries.
Corporate Strategy
Icelandair's corporate strategy provides a compass for the entire organization, articulating its vision, strategic priorities and
the core values of the Company. Icelandair's vision, the guiding light of the organization, is to ‘bring the spirit of Iceland to
the world’ and its mission is to ‘offer smooth and enjoyable journeys to, from, via and within Iceland, our hub and home’.
The values of ‘passion’, ‘simplicity’ and ‘responsibility’ represent the foundation of the Company culture, and the guiding
principles that represent the keys to successful decision making and resource allocation in the day-to-day operation are:
• The way to fly to, from, via and within Iceland.
• Agile and financially sustainable.
• Embracing our people and the planet.
Each year Icelandair defines formal corporate objectives that set out priorities for the year to provide the employees with
further guidance on the Company’s strategic direction. In 2025, Icelandair worked towards four corporate objectives and
made good progress towards each one:
• Be the leading hub carrier in Keflavik.
• Reinforce workplace excellence and embrace opportunities.
• Transform our ways of working to achieve sustainable profitability.
Core
elements of the due diligence process
Disclosure requirement
a) Embedding due diligence ESRS 2; GOV-1, Topical standards: E1-4, E2-4, E5-1, S1-1, S2-
1, S3-1, S4-1, G1-1
b) Engaging with affected stakeholders ESRS 2; SBM-2, Topical standards: S1-2, S2-2, S3-2, S4-2
c) Identifying and assessing adverse impacts ESRS 2; IRO-1
d) Taking actions to address adverse impacts Topical standards: E1-5, E2-2, E5-2, S1-3, S2-3, S3-3, S4-3,
G1-
2, G1-2
e) Tracking the effectiveness of these efforts and
communicating
Topical standards: E1-8, E1-9, E5-5, S1-5, S1-7, S1-8, S1-13,
S1-14, S1-15, S1-16, S2-4, S3-4, S4-4, G1-4, G1-6
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 57 Amounts are in USD thousands
Business model, value chain and strategy, contd.
Corporate Strategy, contd.
For 2026, Icelandair sharpens its focus even further with a single corporate objective:
• Build a competitive cost base to secure our long-term resilience and strengthen our essential role in Iceland’s
economy and global connectivity
Icelandair is simplifying its objectives to sharpen focus and strengthen alignment across the organization. Fewer, clearer
priorities reduce confusion, enable faster decisions, and free up capacity for the work that matters most. This clarity also
increases ownership, improves accountability, and ensures teams stay consistently focused on actions that drive
sustainable performance and lasting transformation.
ESG Strategy
Rooted in Icelandair’s core values, the ESG strategy serves as a guiding framework for how the Company embraces
responsibility towards its people and the planet, which is one of the key principles of the overall corporate strategy. The
ESG strategy is structured around Environment, Society and Governance where three focus areas have been identified
and prioritized for each. The nine sustainability focus areas were developed during 2025 and will be supported by specific
targets and measurable metrics to track progress on performance. Ultimately, the ESG strategy is designed to enable a
strong integration of sustainability in the core business of Icelandair, in line with the overall Company strategy.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 58 Amounts are in USD thousands
Business model, value chain and strategy, contd.
Interest and views of stakeholders
The Company engages on an ongoing basis with a broad range of stakeholders that are affected by, or have an interest
in, its activities. Key stakeholder groups include employees and representatives, future employees, customers, suppliers
and business partners, local and affected communities, investors and shareholders, authorities and government, NGOs,
the general public and media. Engagement takes place through a variety of formal and informal channels, including
customer feedback mechanisms, employee dialogue and collective bargaining processes, regular interactions with
business partners and authorities, and investor communications.
Through these engagement activities, Icelandair seeks to understand stakeholder interests, expectations and concerns as
they relate to its business model, strategy and long-term value creation. The insights gained help inform strategic priorities
and the identification and management of key impacts, risks and opportunities.
Relevant information on stakeholder views and interests is communicated to the Executive Committee by relevant
Executive members responsible for the stakeholder group and the Sustainability team.
Interaction of impacts, risks and opportunities with strategy and business model
Icelandair’s business model is associated with sustainability-related impacts, positive and negative, across its operations
and value chain. Material impacts arise from energy-intensive operations, a large and diverse workforce, and Icelandair’s
role in connecting Iceland and key domestic, regional and international destinations for customers and communities. In
turn, the Company’s most material sustainability-related financial risks are climate-related transition risks, driven by
regulatory and market developments affecting aviation, including increased environmental compliance costs. These risks
have affected operating costs and financial performance during the reporting period. At the same time, the business model
also presents opportunities, including efficiency gains from fleet renewal and operational improvements, and long-term
value creation through reliable connectivity, customer trust, and a skilled workforce.
Material sustainability matters
The concept of double materiality is presented in the EU Corporate Sustainability Reporting Directive (CSRD). Double
materiality, as defined by the CSRD, comprises impact materiality and financial materiality. Impact materiality refers to a
business’ impact on the environment and society while financial materiality refers to the risks and opportunities that a
company faces in relation to the environment and society. A sustainability matter is considered ‘material’ for a company if
it fulfils the requirements for impact materiality, financial materiality, or both. Icelandair completed its initial double materiality
assessment in 2023 and reviewed and updated it in 2025. The Double Materiality Assessment will be reviewed bi-annually
unless any significant changes occur in the Company’s management system or business model.
Description of the process to identify and assess material impacts, risks and opportunities
The Double Materiality assessment was conducted with a four-step approach as follows:
1. Preparation and scoping
The business model and value chain, along with Icelandair’s key activities, were mapped to establish a common point of
reference for the assessment and define the assessment boundaries.
2. Mapping impacts, risks and opportunities
"Mapping Workshops" were held to identify potential impacts, risks and opportunities (IRO). The workshops were informed
by IROs previously identified through Icelandair’s due diligence processes, including the environmental management
system, the risk registry and previous materiality assessments. Additionally, the sustainability topics, sub-topics and sub-
sub-topics outlined in Article 16 of ESRS 1 were incorporated into the mapping process. Risks and opportunities were
identified based on related impacts and Icelandair’s dependencies on specific resources. The IRO identification process
was conducted across different parts of the value chain, enabling the identification of potential hotspots. The workshops
involved relevant internal stakeholders from Icelandair, as well as external sustainability experts.
3. Assessing materiality
The third step was to assess the materiality of identified impacts, risks and opportunities. For impact materiality,
assessment criteria for the dimensions scale, scope, irremediability and likelihood need to be set. The scales used in the
Double Materiality Assessment were based on the following: The OECD Guidelines for Multinational Enterprises, the UN
Guiding Principles, the ESRS 1 General Requirements, Icelandair’s existing assessment scales, where applicable, as well
as external experts on human rights, risk and environmental impact assessment. The assessment of financial materiality
was conducted using predefined scales for the size of financial effect and likelihood. The scale for evaluating the financial
impact of sustainability topics aligns with Icelandair’s Risk Assessment framework and associated manuals and guidelines,
ensuring a streamlined and consistent approach.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 59 Amounts are in USD thousands
Material sustainability matters, contd.
Description of the process to identify and assess material impacts, risks and opportunities, contd.
4. Validation and reporting
The assessment of materiality of all IRO’s was validated by the Sustainability team. Next, the results were mapped on a
materiality matrix and validated by the Executive team.
Results of the Double Materiality Assessment
As a result of the Double Materiality Assessment, eight of the ten ESG topics have been assessed as material for Icelandair.
Icelandair recognizes that the Double Materiality Assessment is an ongoing process, with objectives extending beyond
reporting purposes. Insights gained from the assessment and stakeholder feedback have already started shaping
Icelandair’s strategy and the Company’s approach to sustainability.
Environment
Introduction
Operating an airline involves inherent environmental challenges, and Icelandair is committed to contributing to a more
sustainable future for aviation. As outlined in the Company’s ESG Strategy, the focus is on reducing aircraft emissions,
managing noise impacts and pollution, and minimizing waste across operations.
These efforts are guided by Icelandair’s Environmental Management system (EMS). Icelandair is certified to the highest
level of the IEnvA environmental assessment program from the International Air Transport Association (IATA), which
requires demonstration of ongoing environmental performance improvements. The IEnvA program is based on recognized
environmental management principles, ISO 14001, and assessments are conducted by accredited independent
organizations. Beyond the Company’s internal initiatives, Icelandair actively collaborates on industry-wide sustainability
efforts. The Company participates in environmental working groups within organizations such as IATA and Airlines for
Europe (A4E), working alongside industry partners to drive meaningful change both globally and locally.
Climate change
As an airline, Icelandair recognizes its climate impact and reducing the Company’s impact remains a top priority. The
Company has made significant progress in recent years, most notably through its fleet renewal program and by improving
fuel efficiency through a number of operational improvements, including flight planning optimization, increased focus on
weight and flight efficiency, and increased use of data to support operational decision-making. These actions have resulted
in measurable reductions in fuel consumption per flight and thus lower emissions per flight.
Materiality
Icelandair’s operations, including flights and ground handling activities, generate greenhouse gas (GHG) emissions.
Aviation is a significant source of emissions, primarily due to the combustion of aviation fuel, and the industry has committed
to achieving net-zero carbon emissions by 2050. Technological advances have enabled new-generation aircraft to reduce
emissions by approximately 20–30% compared with older models. However, the transition to alternative fuels remains
challenging. In addition to flight operations, GHG emissions arise from ground handling and across the wider value chain,
including aircraft and fuel production, passenger transport to and from airports, and waste management. Icelandair is
exposed to transition risks arising from climate-related regulation under e.g. the EU Green Deal and the “Fit for 55”
package, as well as physical climate risks affecting its assets and operations. Accordingly, both transition and physical
climate risks have been identified as material.
Topic Impact materiality Financial materiality
Climate change
Material
Material
Pollution
Material
Not Material
Water and marine resources
Not Material
Not Material
Biodiversity
Not Material
Not Material
Resource use and circular economy
Material
Material
Own workforce
Material
Material
Workers in the value chain
Material
Material
Affected communities
Material
Not Material
Consumers and end users
Material
Material
Business Conduct
Material
Material
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 60 Amounts are in USD thousands
Climate change, contd.
Transition risk
As part of the European Green Deal and the “Fit for 55” legislative package, the European Union has introduced a range
of regulatory measures aimed at reducing greenhouse gas emissions and aligning economic activity with the EU’s climate
targets, including a reduction of net emissions by at least 55% by 2030 and climate neutrality by 2050. As an airline
operating within the European Economic Area, Icelandair is subject to these regulatory developments. The transition to a
lower-carbon aviation system creates regulatory and financial transition risks for the company, primarily through rising
environmental compliance costs. The company's environmental costs are increasing due to rising prices of emission
allowances under the EU Emissions Trading System (EU ETS), the reduction in the number of free emission allowances
allocated to airlines and the introduction and scaling up of SAF requirements.
Aviation has been included in the EU ETS since 2012. Over time, the total number of emission allowances in the system
has been steadily reduced. Regulatory changes adopted in 2023 accelerate this reduction and introduce a more aggressive
phase-out of free allowances for airlines between 2024 and 2026. These changes increase compliance costs for airlines,
despite the sector having limited technical options to materially reduce emissions in the near term. Due to Iceland’s
geographical location on the periphery of Europe and its reliance on air transport, these developments disproportionately
affect Icelandair. Unlike most European countries, Iceland has no alternative means of international travel. Longer average
flight distances to Europe result in higher emissions per flight and therefore higher relative ETS costs. This increases the
risk that flights operated by Icelandic carriers become more expensive compared to both EEA and non-EEA competitors,
potentially leading to carbon leakage and reduced competitiveness.
To mitigate the risks of the reduction of emission allowances disproportionately affecting Iceland, the Icelandic government
negotiated a special adaptation of EU ETS rules with the European Commission for airlines flying from Iceland. The
Icelandic government is allowed to allocate allowances free of charge to airlines that submit a verified carbon neutrality
plan. In 2025, Icelandair submitted a carbon neutrality plan to the Environment and Energy Agency. Uncertainty remains
regarding the ETS framework beyond 2026, which complicates long-term pricing and planning.
In addition to the EU ETS, the Regulation (EU) 2023/2405 (“ReFuelEU Aviation”) entered into force on 1 January 2024.
The regulation aims to create a level playing field for sustainable air transport by mandating the gradual introduction of
SAF. From 2025, fuel uplifted at EU airports must contain at least 2% SAF, with the required share increasing over time to
70% by 2050. ReFuelEu applies to all Icelandair flights departing from European outstations. However, it has not yet been
implementation in Iceland, as the timeline aligns with that of other countries within the European Economic Area.
The implementation of ReFuelEu during 2025 has involved uncertainties regarding the practical application of
documentation requirements, including the availability, content and allocation of compliance documentation to airlines. In
addition, as fuel suppliers may not physically deliver SAF to all airports, airlines may be constrained in their ability to claim
the price differential between conventional jet fuel and SAF, which may affect the effective cost of compliance.
More broadly, SAF remains difficult to source, and limited availability combined with high prices presents a material
challenge to Icelandair’s climate transition. It is therefore crucial to solve these constraints.
During 2025, Icelandair continued to actively engage with policymakers and stakeholders to highlight the importance of
aviation for Iceland’s connectivity and economic prosperity. The Company continues to advocate for climate policies that
support decarbonization while avoiding disproportionate impacts on airlines operating from geographically remote regions.
If regulatory developments remain unchanged, Icelandair expects environmental compliance costs to increase materially
in the coming years.
Physical risk
Icelandair is exposed to physical climate risks, such as changing weather patterns, rising sea levels and extreme
temperatures due to its dependence on weather conditions. Such climate related events can pose a challenge to the
operations and impact infrastructure stability and flight operations. Recognizing the importance of proactively addressing
these challenges, Icelandair plans to conduct a climate risk and resilience assessment with the aim to identify and evaluate
its primary physical climate risks, enabling the Company to develop strategies to mitigate its impacts and enhance the
resilience of the operations.
For further information see the Operational risk chapter.
Decarbonization roadmap
Icelandair’s long-term climate target is to achieve carbon neutrality by 2050, in line with international agreements and the
European Union’s climate objectives. The Company’s decarbonization roadmap focuses on the most effective levers
available today, with fleet renewal and operational improvements driving emissions reductions in the short to medium term.
In parallel, Icelandair is progressively exploring the use of Sustainable Aviation Fuels, which are expected to play an
increasing role in achieving decarbonization in the mid- to long-term.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 61 Amounts are in USD thousands
Climate change, contd.
Policies related to climate change
Icelandair’s Climate and Environmental Policy set out the Company’s commitment to managing its most material
environmental impact. Icelandair Group hf. and its subsidiaries are committed to maintaining a high standard of
environmental performance and to reducing greenhouse gas emissions intensity across operations. The policy further
emphasizes the importance of managing climate-related risks by identifying operational vulnerabilities and investing in
measures that enhance the resilience of operations to the impacts of climate change.
Actions related to climate change
The fleet renewal program combined with operational improvements and the exploration of using alternative fuels, provide
a comprehensive approach to reducing the environmental impact of Icelandair.
Fleet renewal
Modernizing the fleet is among the most effective and immediate strategies for reducing carbon emissions. The transition
from older models to newer generation aircraft with enhanced fuel efficiency yields substantial reductions in fuel
consumption, emissions, and operational expenses. In 2025, Icelandair retired two Boeing 757s and dry leased an
additional two to another airline, while taking delivery of three Airbus A321LR aircraft. These state-of-the-art, fuel-efficient
aircraft represent a key component in the company’s efforts to lower carbon emissions across its operations.
Operational improvements
While fleet renewal is a critical lever to reduce carbon emissions, the full potential of decarbonization efforts will only be
realized with a combination of measures, including operational improvements that optimize fuel efficiency across every
aspect of the operations.
The airline uses modern fuel monitoring and analysis systems (e.g., SkyBreathe) to track performance in real time, identify
inefficiencies, and guide crews in optimizing fuel saving behaviors. This data driven approach enables continuous
optimization of flight operations.
In 2025, Icelandair strengthened its emissions reduction efforts further by implementing a series of data driven operational
improvements aimed at lowering fuel burn and increasing efficiency, such as single engine taxiing out, optimizing alternate
fuel planning, delaying the use of APU after landing and optimizing the aircraft center of gravity by improving the loading
process wholistically.
As infrastructure and new technologies allow, the Company also aims to gradually transition to electric ground support
equipment, thereby reducing emissions from ground operations.
Alternative fuels and innovation
While fleet renewal and operational efficiencies are currently the most impactful levers in the decarbonization strategy,
Icelandair acknowledges the importance of advancing the production and availability of Sustainable Aviation Fuels (SAF)
in the market as it is crucial to support and accelerate the decarbonization path and remains one of the most important
tools for long term emissions reductions, capable of reducing lifecycle CO₂ by up to 80%.. Icelandair has started to integrate
sustainable aviation fuel (SAF) into operations in accordance with the EU’s ReFuelEU initiative, which requires at least 2%
sustainable fuel from 2025 onward.
Beyond SAFs, Icelandair is monitoring the development of other technological innovations, such as hybrid-electric
propulsion systems, carbon capture technologies and new aircraft designs that use alternative energy sources like
hydrogen. By continuously evaluating the potential of these technologies, the decarbonization strategy remains agile and
aligned with the latest advancements in sustainable aviation.
Targets related to climate change
To address the global challenge of climate change, Icelandair has set a target for Scope 1 emissions, aiming to achieve
net zero emissions by 2050, and monitors fuel efficiency and CO2e emissions from flight operations. In addition, the
Company has set a specific target to reduce CO2e emissions by 50% per Operational Ton Kilometer (OTK) from flight
operations by 2030 compared to 2019. The emissions from aviation are reported annually to the Environmental Agency of
Iceland. Operational Ton Kilometer (OTK) is how much CO2e is emitted moving one payload ton over a distance of one
kilometer and takes into consideration the weight of the aircraft, passengers, and cargo.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 62 Amounts are in USD thousands
Targets related to climate change, contd.
The table below shows the progress made in the reduction of carbon emissions intensity 2019-2025.
Icelandair has committed to setting a near-term company-wide emission reductions target in line with the Science Based
Targets initiative (SBTi). Following this commitment, Icelandair started working on developing targets aligned with the
SBTi criteria in 2025 and will continue the work in 2026.
Climate and energy related metrics
Metrics for the Company’s energy consumption and emissions are presented below. The Company has not yet developed
a process to apply internal carbon pricing schemes. Almost 100% of Icelandair’s energy consumption comes from burning
of jet fuel which is a form of fossil fuel. However, 100% of energy and heating used for the Company’s buildings and
facilities in Iceland use energy from renewable sources.
Almost all of Icelandair’s measured GHG emissions come from burning of jet fuel as the production of electricity and heat
in Iceland are mainly from renewable sources and therefore have a low carbon footprint. Icelandair only reports on
Category 5, waste generated in operations under Scope 3 emissions but will work to expand on different categories in
2026.
Pollution
Emissions and aircraft noise are key environmental concerns for the aviation industry. The combustion of aviation fuels
contributes to air pollution and aircraft operations generate noise that can affect local communities. Through Icelandair’s
commitment to reducing its climate impact, the Company simultaneously implements measures that help minimize both air
and noise pollution. In addition, Icelandair manages the environmental and health risks associated with the use of
chemicals and substances of concern across its operations through systematic oversight, risk assessment, and controls
to ensure safe handling, storage, and disposal.
2019
2025
Status %
2030 target
tCO2e/OTK 0.895 0.70 -22% 0.448
Energy consumption and mix (MWh) 2025 2024
Total energy consumption from fossil sources
4,632,215
4,479,737
Fuel consumption from coal and coal products
0
0
Fuel consumption from crude oil and petroleum products;
4,632,215
4,479,737
Fuel consumption from natural gas;
0
0
Fuel consumption from other fossil sources;
0
0
Consumption of purchased or acquired electricity, heat, steam,
0
or cooling from fossil sources;
Total energy consumption from nuclear sources
0
0
Total energy consumption from renewable sources
17,448
21,519
Total energy consumption
4,649,663
4,501,256
0
GHG emissions
Units
2025
2024
Change
Scope 1 GHG emissions
Gross Scope 1 GHG emissions tCO2e 1,211,974 1,167,660 4%
Percentage of Scope 1 GHG emissions from
the EU Emissions Trading System (EU ETS)
Scope 2 GHG emissions
Gross location-based Scope 2 GHG emissions
tCO2e
152
168
-10%
Gross market-based Scope 2 GHG emissions
tCO2e
0
0
Significant Scope 3 GHG emissions
Total Gross indirect Scope 3 GHG emissions
tCO2e
56
89
-37%
5. Waste generated in operations
56
89
Total GHG emissions
1,212,182
1,167,917
4%
41% -7%38%%
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 63 Amounts are in USD thousands
Pollution, contd.
Materiality
The combustion of aviation fuel results in air pollutant emissions in addition to greenhouse gases, and as these impacts
arise from the same sources and are addressed through the same mitigation measures, such as fleet renewal, operational
improvements, and the exploration of alternative fuels, air pollution from flight operations is managed alongside climate
impacts and therefore covered under the Climate Change section. Although noise pollution is not defined as a sub-topic
under the ESRS, it is a material concern for Icelandair. Aircraft noise can impact communities and habitats around airports,
particularly due to the noise generated during takeoff and landing. Through the commitment to reducing the climate impact,
the Company simultaneously implements measures that help minimize both air and noise pollution.
Additionally, Icelandair uses substances of concern in its operations which can negatively impact the environment and
health if not managed properly.
Policies related to pollution
As outlined in the Climate and Environmental Policy, Icelandair acknowledges aviation’s impact on the natural environment
and public health through air pollutant emissions, the use of substances of concern, and aircraft noise affecting surrounding
communities and airport workers and is committed to mitigating these impacts. The Company works to prevent
environmental incidents, such as fuel spills, and to minimize their impacts when they occur, manages substances of
concern, reports incidents through its Safety Management System, and follows noise abatement procedures to reduce
impacts on local communities.
Actions related to pollution
Noise pollution
The commitment to mitigate the negative impacts of noise pollution is reflected in the Company’s climate actions, such as
renewing the fleet to newer generation aircraft and implementing operational improvements. Noise pollution is one of the
environmental issues that are addressed in the Company’s EMS. To minimize the impact on the surroundings, the
International Civil Aviation Organization (ICAO) and the European Union Aviation Safety Agency (EASA) have established
stringent noise regulations and Icelandair has operational procedures in place to comply with these requirements and
guidelines.
Substances of concern
During 2025, Icelandair systematically worked to strengthen its management of substances of concern by improving
oversight, risk assessment, and internal processes related to chemical use. A comprehensive overview of chemicals
used across operations was established using the EcoOnline system. All chemical products were inventoried, mapped to
their locations and areas of use, and linked to up-to-date safety data sheets to ensure accessibility and compliance.
Chemical hazard assessments were conducted, and work continued to identify and evaluate alternative, less hazardous
materials where feasible. For certain toxic substances, appropriate permits and licenses were maintained in accordance
with regulatory requirements. In parallel, educational materials were developed to increase awareness and support safe
handling of chemicals among employees. Risk reduction measures focused on limiting the quantities of chemicals stored
on site and improving storage practices. Monitoring of waste sorting was also strengthened to ensure that chemical
waste and related materials are correctly separated and disposed of at appropriate facilities.
Targets related to pollution
Noise pollution from Icelandair’s operations is closely linked to the Company’s GHG emissions. The climate targets are
therefore expected to address these pollution impacts. As a result, Icelandair has not established specific targets for noise
pollution. The Company’s broader objective is to continuously monitor and enhance the overall environmental performance,
including incidents such as fuel spills, optimizing the use of de-icing fluids and refrigerants, and systematically tracking all
environmental incidents through the EMS.
Resource use and circularity
Icelandair’s approach to resource use and circularity is centered on minimizing waste from its operations, reducing
unnecessary consumption and optimizing resource efficiency by reusing valuable materials whenever possible, and
prioritizing onboard recycling initiatives.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 64 Amounts are in USD thousands
Resource use and circularity, contd.
Materiality
Resource inflows are considered a material topic as airlines depend heavily on resources for operations, including fuels,
aircraft maintenance materials, food and goods for passenger services. Icelandair reuses and recycles aircraft parts
when retiring old generations, specializing in end-of-life solutions and the trading of parts for Boeing aircraft. Waste
management is also a material topic as Icelandair contributes to waste generation through various processes, such as
inflight and maintenance activities. In general, airlines rely largely on single-use plastics for packaging, food containers
and cutlery, and there are challenges improving recycling on board due to limited infrastructure, logistical constraints and
regulations for waste management.
Resource inflows have been assessed as financially material for Icelandair in the long term, as Icelandair faces potential
risks associated with supply chain disruption and resource scarcity, as some materials critical to airline operations include
critical raw materials. The financial implications will depend on factors such as the type of resource, the degree of
dependency and the actual availability of the resource in the market at a given time.
Policies related to resource use and circularity
Icelandair’s Climate and Environmental Policy addresses the material environmental impacts and risks related to
resource use and waste generation arising from its operations. The policy’s objective is to reduce waste, promote
efficient use of resources, and support the transition to a circular economy, while managing regulatory and supply-chain
risks. To achieve this, Icelandair commits to applying the waste hierarchy, promoting responsible resource use, reducing
single-use plastics and optimizing cabin consumables, and adopting responsible procurement practices in collaboration
with suppliers and industry partners.
Actions related to resource use and circularity
Icelandair has implemented several successful initiatives to optimize resource use and enhance waste recycling across
the Company. Key actions include reusing aircraft parts, introducing onboard recycling, and reducing food waste by
offering passengers the option to pre-order their onboard meals to reduce the amount of fresh food onboard. The
Company has also prioritized sustainable materials and reducing waste, for example when renewing the on-board textile
concept, recycled materials were chosen. Icelandair is actively working to eliminate single-use plastics and consumables
onboard. Icelandair launched a new amenity kit in October that highlights and celebrates Icelandic nature in collaboration
with well-known local artist and ceramicist Inga Elín. To reduce waste, Icelandair will offer “on-demand” amenity kits,
which are listed on the drink menu for North American routes. Passengers can select the items they find useful for their
flight, so they receive only what meets their needs. The contents remain the same, but passengers now have the option
to assemble their own amenity kits.
Targets related to resource use and circularity
Laws and regulations have always restricted waste separation on board, and Icelandair has for years called for changes
in regulations in Iceland on recycling waste from international flights, which has until 2023 all been incinerated due to these
regulations.
Icelandair has set goals related to efficient material use in line with the Company’s policy commitments. The waste target
for 2025 was to recycle at least 40% of on-board waste but only approximately 20% of on-board waste was recycled during
the year due to a number of reasons that will be investigated further in 2026 to increase the recycling rate.
Resource use and circularity related metrics
Icelandair’s main material resource inflow is aircraft. During 2025, Icelandair took delivery of three new Airbus A321LR
aircraft.
Icelandair uses a waste management system provided by Klappir Green Solutions, which digitally tracks and breaks all
waste-related data down to the operational units. The waste streams generated from Icelandair’s operations are typical for
aviation companies and include cabin and maintenance waste. The materials presented in Icelandair’s waste are food
waste, mixed waste, aluminum scrap, plastic waste, paper, wood waste, batteries, electronic waste, oil waste and
automotive scrap.
The total amount of waste produced by Icelandair in Iceland, including at the Keflavík hub, was 623 tons in 2024, down
from 808 tons the previous year. This decline is mainly due to Icelandair outsourcing its catering operations to an
international catering company during 2024; because international catering waste is handled through that provider’s
facilities, the waste figures for 2024 only include this stream for the early part of the year. The largest waste category aside
from on-board waste is mixed waste from aircraft cleaning, which includes lavatory waste. Additionally, food and beverage
waste from international flights must be incinerated or sent to landfill in accordance with international catering regulations.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 65 Amounts are in USD thousands
Resource use and circularity, contd.
Resource use and circularity related metrics, contd.
EU Taxonomy
As described by the European Commission, the EU Taxonomy is a classification system for determining sustainable
economic activities that provides companies, investors, and policymakers with appropriate definitions for which economic
activities can be considered environmentally sustainable.
Icelandair’s Taxonomy-eligible activities
Icelandair is eligible for four economic activities included in the amended Climate Delegated Act. Eligibility and alignment
on turnover, capital expenditures and operating expenditures related to these activities are reported, however, no alignment
was achieved in 2025. The Company will continue to work to track changes and simplifications made to the EU Taxonomy
and work on alignment, fulfilling the minimum safeguards, and further implementation of the EU Taxonomy.
3.21 Manufacturing of aircraft
Description of the activity: Manufacture, repair, maintenance, overhaul, retrofitting, design, repurposing and upgrade of
aircraft and aircraft parts and equipment.
Icelandair has financial streams relating to manufacturing of aircraft, specifically repair and maintenance.
Taxonomy-eligible turnover from this economic activity is generated in connection with maintenance, repair, overhaul
services and the sale of spare parts. The turnover of USD 2 million represents 0.1% of Icelandair’s overall turnover. The
expenditure of USD 35 million accounts for 30.1% of the capital expenditure for the reporting year. The economic activity
accounts for USD 152 million and 9.6% of Icelandair’s total Operating expenses.
6.18 Leasing of aircraft
Description of the activity: Renting and leasing of aircraft and aircraft parts and equipment.
Icelandair has financial streams relating to leasing of aircraft. Through its leasing business, Loftleidir Icelandic, Icelandair
is involved in the leasing of aircraft for airlines and tour operators.
The Taxonomy-eligible turnover of USD 110 million represents 6.3% of Icelandair’s overall turnover. The expenditure of
USD 27 million accounts for 22.7% of the capital expenditure for the reporting year. The economic activity accounts for
USD 74 million and 4.6% of Icelandair’s total Operating expenses.
Waste (kg)
2025
2024
Total weight of waste generated 623,460 808,376
Proportion of waste diverted from disposal
83%
79%
Non-hazardous
519,333
639,875
Preperation for reuse
0
0
Recycling
200,946
297,317
Other recovery operations
318,387
342,558
Hazardous
7
0
Preperation for reuse
0
0
Recycling
7
0
Other recovery operations
0
0
Proportion of waste diverted to disposal
17%
21%
Non-hazardous
102,729
164,553
Incineration
17,455
2,759
Landfill
85,274
161,794
Other disposal operation
0
0
Hazardous
1,391
3,948
Incineration
407
3,948
Landfill
11
0
Other disposal operation
973
0
Proportion of waste for which the final destination is unkown
0%
0%
Total amount of radioactive waste 0 0
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 66 Amounts are in USD thousands
EU Taxonomy, contd.
Icelandair’s Taxonomy-eligible activities, contd.
6.19 Passenger and freight air transport
Description of the activity: Purchase, financing, and operation of aircraft including transport of passengers and goods. The
economic activity does not include leasing of aircraft referred to in Section 6.18.
Icelandair has financial streams relating to passenger and airfreight transport. Icelandair operates an international route
network that connects Europe and North America, serving passengers to, from, via and within Iceland. The focus of
Icelandair’s airfreight and logistics operations is on freight services to, from and via Iceland, by leveraging the passenger
route network, in addition to scheduled air freighter flights, operated on a designated cargo aircraft.
The Taxonomy-eligible turnover of USD 1,588 million represents 91.2% of Icelandair’s overall turnover. The expenditure of
USD 49 million accounts for 41.7% of the capital expenditure for the reporting year. The economic activity accounts for
USD 1,202 million and 75.9% of Icelandair’s total Operating expenses.
6.20 Air transport ground handling operations
Description of the activity: Manufacture, repair, maintenance, overhaul, retrofitting, design, repurposing and upgrade,
purchase, financing, renting, leasing and operation of equipment and service activities, including ground services activities
at airports and cargo handling, such as loading and unloading of goods.
Icelandair has financial streams relating to ground handling operation. Ground handling involves a range of services
provided on the ground to aircraft, passengers and cargo.
The Taxonomy-eligible turnover of USD 25 million represents 1.4% of Icelandair’s overall turnover. The CapEx for this
economic activity includes expenditure on purchase and maintenance on ground handling equipment. The expenditure of
USD 6 million accounts for 5.5% of the capital expenditure for the reporting year. The economic activity accounts for USD
157 million and 10% of Icelandair’s total Operating expenses.
Taxonomy non-eligibility
Icelandair's business activities that are currently not included in the EU Taxonomy, and thus not assessed as Taxonomy
eligible, comprise the Taxonomy non-eligible percentage (%).
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 67
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities for year 2025.
Economic Activities (1)
Code (2)
Absolute turnover (3)
Proportion of Turnover (4)
Climate Change Mitigation (5)*
Climate Change Adaptation (6)
Water
(7)
Pollution
(8)
Circular Economy
(9)
Biodiversity and ecosystems (10)
Climate Change Mitigation (11)
Climate Change Adaptation (12)
Water
(13)
Pollution
(14)
Circular Economy
(15)
Biodiversity
(16)
Minimum Safeguards
(17)
Taxonomy
aligned
proportion
of total
turnover,
year N (18)**
Category
(enabling
activity)
(20)
Category
(transitional
activity)
(21)
Millions,
USD
% % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
0.00 0% _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Air transport ground handling operations 6.20 25 1.4% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Leasing of aircraft 6.18 110 6.3% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Manufacturing of aircraft 3.21 2 0.1% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Passenger and freight air transport 6.19 1,588 91.2% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
1,725 99.0% _ _ _
1,725 99.0% _ _ _
16 0.9%
1,741 100%
Y - Yes , Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N - No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL - Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective
* For the purposes of this illustrative template, this figure shows the: Taxonomy-aligned turnover of the activity / Total Taxonomy eligible turnover of the activity.
** Taxonomy-aligned turnover of the activity/ Total turnover of undertaking
Turnover of Taxonomy-non-eligible activities
Total (A+B)
Legal Disclaimer
The content of the tool does not extend or alter in any way the rights and obligations deriving from the EU legislation nor does it introduce any additional requirements on the concerned operators and competent authorities. It does not substitute the provisions
under the EU Taxonomy Regulation ((EU) 2020/852) and its Delegated Acts that the undertaking should follow. The purpose of the output of the tool (Excel file) is merely to give an instructive example for some undertakings on how to implement the relevant legal
provisions. It cannot be excluded that the Excel Sheet does not include all information that an undertaking may need to report under the EU Taxonomy Regulation ((EU) 2020/852). It should be noted that the current template does not yet refer to the updated
reporting templates included in Annex V to Delegated Regulation (EU) 2023/2486 (‘Environmental Delegated Act’), which amends Delegated Regulation (EU) 2021/2178.
Turnover of Taxonomy-eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities) (A.2)
Total (A.1+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of environmentally sustainable activities (Taxonomy-aligned)
(A.1)
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Substantial Contribution Criteria DNSH criteria ('Does Not Significantly Harm')
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 68
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities for year 2025.
Economic Activities (1)
Code (2)
Absolute CapEx (3)
Proportion of CapEx (4)
Climate Change Mitigation
(5)*
Climate Change Adaptation
(6)
Water
(7)
Pollution
(8)
Circular Economy
(9)
Biodiversity and ecosystems
(10)
Climate Change Mitigation
(11)
Climate Change Adaptation
(12)
Water
(13)
Pollution
(14)
Circular Economy
(15)
Biodiversity
(16)
Minimum Safeguards
(17)
Taxonomy
aligned
proportion
of total
CapEx,
year N (18)**
Category
(enabling
activity)
(20)
Category
(transitional
activity)
(21)
Text
Millions,
local CCY
% % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
0.00 0% _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Air transport ground handling operations 6.20 6 5.5% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Leasing of aircraft 6.18 27 22.7% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Manufacturing of aircraft 3.21 35 30.1% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Passenger and freight air transport 6.19 49 41.7% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
117 100% _ _ _
117 100% _ _ _
0.00 0%
117 100%
Y - Yes , Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N - No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL - Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective
* For the purposes of this illustrative template, this figure shows the: Taxonomy-aligned turnover of the activity / Total Taxonomy eligible turnover of the activity.
** Taxonomy-aligned CapEx of the activity/ Total CapEx of undertaking
Capex of Taxonomy-non-eligible activities
Total (A+B)
Legal Disclaimer
The content of the tool does not extend or alter in any way the rights and obligations deriving from the EU legislation nor does it introduce any additional requirements on the concerned operators and competent authorities. It does not substitute the provisions under
the EU Taxonomy Regulation ((EU) 2020/852) and its Delegated Acts that the undertaking should follow. The purpose of the output of the tool (Excel file) is merely to give an instructive example for some undertakings on how to implement the relevant legal provisions.
It cannot be excluded that the Excel Sheet does not include all information that an undertaking may need to report under the EU Taxonomy Regulation ((EU) 2020/852). It should be noted that the current template does not yet refer to the updated reporting templates
included in Annex V to Delegated Regulation (EU) 2023/2486 (‘Environmental Delegated Act’), which amends Delegated Regulation (EU) 2021/2178.
CapEx of Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
Total (A.1+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1)
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned)
Substantial Contribution Criteria DNSH criteria ('Does Not Significantly Harm')
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. CapEx of environmentally sustainable activities (Taxonomy-aligned)
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 69
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities for year 2025.
Economic Activities (1)
Code (2)
Absolute OpEx (3)
Proportion of OpEx (4)
Climate Change Mitigation (5)*
Climate Change Adaptation (6)
Water
(7)
Pollution
(8)
Circular Economy
(9)
Biodiversity and ecosystems
(10)
Climate Change Mitigation (11)
Climate Change Adaptation (12)
Water
(13)
Pollution
(14)
Circular Economy
(15)
Biodiversity
(16)
Minimum Safeguards
(17)
Taxonomy
aligned
proportion
of total
OpEx,
year N (18)**
Category
(enabling
activity)
(20)
Category
(transitional
activity)
(21)
Text
Millions,
local CCY
% % % % % % % Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
100%
0.00 0% _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Air transport ground handling operations (OpEx A) 157 10.0% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Leasing of aircraft (OpEx A) 74 4.6% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Manufacturing of aircraft (OpEx A) 152 9.6% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Passenger and freight air transport (OpEx A) 1,202 75.9% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
1,584 100% _ _ _
1,584 100% _ _ _
0.00 0%
1,584 100%
Y - Yes , Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective
N - No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective
N/EL - Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective
* For the purposes of this illustrative template, this figure shows the: Taxonomy-aligned turnover of the activity / Total Taxonomy eligible turnover of the activity.
** Taxonomy-aligned OpEx of the activity/ Total OpEx of undertaking
OpEx of Taxonomy-non-eligible activities
Total (A+B)
Legal Disclaimer
The content of the tool does not extend or alter in any way the rights and obligations deriving from the EU legislation nor does it introduce any additional requirements on the concerned operators and competent authorities. It does not substitute the
provisions under the EU Taxonomy Regulation ((EU) 2020/852) and its Delegated Acts that the undertaking should follow. The purpose of the output of the tool (Excel file) is merely to give an instructive example for some undertakings on how to
implement the relevant legal provisions. It cannot be excluded that the Excel Sheet does not include all information that an undertaking may need to report under the EU Taxonomy Regulation ((EU) 2020/852). It should be noted that the current template
does not yet refer to the updated reporting templates included in Annex V to Delegated Regulation (EU) 2023/2486 (‘Environmental Delegated Act’), which amends Delegated Regulation (EU) 2021/2178.
OpEx of Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities)
(A.2)
Total (A.1+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of environmentally sustainable activities (Taxonomy-
aligned) (A.1)
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
Substantial Contribution Criteria DNSH criteria ('Does Not Significantly Harm')
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 70
Social
Introduction
Icelandair is committed to respecting human rights and fostering a culture where all people are treated with trust, dignity,
respect, fairness, and equity. This commitment applies across the Company’s own operations and extends to workers in
the value chain, customers, and the communities affected by its activities.
As expectations from society, business partners, and stakeholders continue to grow, Icelandair has begun strengthening
its sustainability and human rights due diligence processes. These efforts aim to better identify, manage, and address
social impacts and risks, while demonstrating responsible business practices and supporting long-term value creation.
Own workforce
All Icelandair employees are a part of the same team and the Company’s core values – passion, simplicity and responsibility
– are the principles that guide us to maintain a strong and motivating company culture. We are committed to our employee’s
personal growth, and we focus on fostering a culture of equality, diversity, inclusion and belonging for all. We promote a
culture that recognizes that employee wellness is fundamental to performance and safety.
Materiality
Working conditions, specifically health and safety, along with equal treatment and opportunities are key material topics for
Icelandair.
Actual positive impacts relate to training and skills development for employees. Icelandair provides role-specific and
company-wide training, which is critical in the airline industry for ensuring safety, regulatory compliance, customer
satisfaction, operational efficiency and adaptability to industry changes. Icelandair actively promotes gender equality in the
workforce, setting an example for the industry, and has one of the highest proportions of female pilots in the world.
Icelandair has also rapidly increased the number of male flight attendants. The Company has policies and procedures in
place to prevent workplace violence and harassment.
Potential negative impacts relate to health and safety faced by employees in various roles. For example, ground handling
workers are exposed to harsh weather conditions and handling of luggage, maintenance staff may encounter harmful
substances, and flight crew members may face occupational hazards. Icelandair's employees can face challenging
situations due to long working hours and disruption to work plans which can affect their work-life balance. Icelandair
recognizes that employee wellness is essential for performance and safety and works continuously to improve the working
conditions of its employees to prevent negative impacts.
Additionally, labor strikes or disputes, particularly with pilots, cabin crew, aircraft maintenance technicians and other
ground staff, could pose financial risks in the medium-to-long term. Such disruptions may lead to flight cancellations,
delays, and customer dissatisfaction, impacting overall operations. Icelandair is currently managing three open collective
agreements with pilots, cabin crew and technicians, and this carries some inherent risk for the organization.
Policies related to employees
Icelandair commits to upholding human rights and fair labor practices, with employees adhering to the Company’s Code
of Ethics. Equal opportunities and rights are central to Icelandair’s Equal Rights Policy and Equal Rights Plan, which drive
active and measurable equality efforts throughout the Company. The Equality Plan encompasses key areas such as equal
pay, recruitment, training, work-life balance, and the prevention of workplace harassment. The Equal Rights Policy explicitly
prohibits all forms of discrimination, including those based on gender, origin, opinions, disability, reduced work capacity,
age, sexual orientation, gender identity, sexual identity, or any other status. Icelandair has implemented an Equal Pay
Policy supported by an Equal Pay System to ensure that employees receive equal wages for work of equal value,
irrespective of gender, and ensure that all employees are paid a fair and adequate wage.
The Company offers a flexible working policy, including opportunities for remote work where job responsibilities do not
require on-site presence. This approach supports employee flexibility and work–life balance, while also enabling the
Company to attract and retain the best talent regardless of geographic location.
Icelandair’s comprehensive Health & Attendance Policy applies to all employees working for the Company and its purpose
is to preserve employee health and includes various health-related programs and initiatives to further employees' health
and wellbeing.
During 2025, Icelandair developed a Human Rights policy aligned with international frameworks, specifically the UN
Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises, that will be
implemented in 2026.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 71
Social, contd.
Own workforce, contd.
Engaging with employees
To support the Company commitments and engage with employees, Icelandair conducts regular engagement surveys and
monitors the employee Net Promoter Score (eNPS), and ensures employees have accessible channels to raise concerns.
To simplify the reporting of undesirable behavior, breach of legal obligations or other misconduct, Icelandair has
implemented a simple online announcement tool, Tilkynna.is. The tool allows employees to submit reports anonymously.
Reporters gain access to a secure communication channel to receive updates on their reports. To ensure effective use of
this tool, all employees receive information on how to use the tool as part of regular training.
Employees who experience bullying, discrimination, or harassment are encouraged to seek support and Icelandair is
dedicated to providing appropriate remediation to individuals in situations where the Company has caused or contributed
to a negative impact. Incidents are addressed on a case-by-case basis and Icelandair collaborates with stakeholders to
resolve issues, communicates actions taken and incorporates lessons learned to prevent future occurrences. Icelandair is
legally obliged to take action on all matters involving bullying, discrimination, or harassment, in accordance with Icelandic
workplace safety legislation, including Act No. 46/1980 and Regulation No. 1009/2015, which require employers to prevent,
assess, and respond to such behavior.
Actions related to employees
Training and skills development
Icelandair believes it is essential for employees to embrace and demonstrate a growth mindset. This approach benefits
both the individual and the company as a whole. Icelandair maintains rigorous safety and security standards, with
detailed action plans and mandatory training for all employees in roles deemed critical to aviation safety or occupational
health. For new employees, the Company offers a comprehensive orientation program that includes e-learning modules
about the Company and health and safety training. Regularly, the People & Culture team curates an ambitious training
schedule featuring both on-site and online courses.
For Icelandair, training is a cornerstone of Flight Safety. Icelandair pilots have responded very well to the full
implementation of Evidence Based Training (EBT) which emphasizes realistic scenarios and a more supportive training
environment than legacy training can offer. EASA’s promotion of Competency Based Training and Assessment has been
embraced by Icelandair’s training department with upgraded programs which are adapted to classrooms, practical
facilities and electronic learning alike for both pilots and cabin crew.
Last year, the practical training facilities were upgraded to meet the highest standards in training. This includes a CEET
Airbus Cabin Emergency Evacuation Trainer, B737 Flight Deck Trainer and a full flight Airbus simulator. Additionally, as a
leading airline in Iceland, Icelandair believes it is important to offer high-quality education in the specialized jobs
performed in aviation and therefore actively supports flight-related education in Iceland through various measures.
Diversity and equal treatment
Icelandair promotes equality by providing equal job opportunities and fairness for employees and job applicants. The first
step to ensure equal opportunities is to reduce the impact of gender stereotypes by showing strong role models and
introducing jobs to underrepresented groups. Icelandair needs to ensure that the roles offered at Icelandair are appealing
and available for everyone. All job advertisements state that Icelandair welcomes and encourages people of all genders to
apply for all available jobs. Icelandair emphasizes to base decisions of recruitment, work conditions, distribution of work,
delegation of working groups, training, and development on neutral and professional work methods, which are not
influenced by gender, religion or origin and create diverse teams.
Working conditions
In the end of 2024, Icelandair relocated its headquarters to the new Icelandair House in Hafnarfjordur. One of the goals of
the new headquarters is to strengthen the Company culture and foster workplace excellence. The headquarters are an
extension of Icelandair’s training center, which was built in 2014. The new facility brings together theoretical and practical
crew training, office operations, customer service, support functions, and the operations control center under one roof.
Additionally, flight crews gather in the building before heading to Keflavík Airport. The headquarters provide a modern and
inclusive work environment with an Activity Based setup, enhanced by improved lighting, noise control, and air quality,
supporting the Company’s goal of becoming Iceland’s most desirable employer. One hundred days following the HQ
relocation, a survey was distributed to employees with workstations in Hafnarfjörður, yielding an 80% response rate. Of
those respondents, 95% reported feeling positive about working in the Icelandair House, and 81% agreed that the
environment encourages collaboration among team members.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 72
Social, contd.
Own workforce, contd.
Actions related to employees, contd.
Employee representation and collective bargaining
Icelandair upholds employees’ rights to organize, engage in social dialogue, and collaborate with worker representatives
across its operations, in line with Iceland’s labor framework where union representation is a cornerstone of employment
relations. The company’s governance and ethics policies promote fair labor practices, mutual respect, and clear channels
for raising concerns, ensuring an environment that supports effective representation.
Employee information, consultation, and participation are facilitated through established structures such as union
representatives, consistent with Icelandic practice. Collective agreements set minimum standards for wages and working
conditions, and individual contracts cannot offer less favorable terms than those agreed collectively.
Health and safety
In 2025, Icelandair strengthened its approach to employee health and wellbeing through several targeted initiatives. The
company updated its Policy, Prevention and Response Plan on Bullying, Harassment and Violence, reinforcing
expectations for a safe and respectful work environment. Following the update, captains and senior cabin crew completed
specialized training delivered by an external provider specialized in occupational safety, with plans to extend this training
to all managers across the company in 2026.
Healthy nutrition continued to be a priority in all company-managed canteens, where balanced and nutritious lunch options
are emphasized. Fresh fruit is available daily to all employees to support healthy choices during the workday.
The company strengthened its focus on occupational safety during the year, emphasizing a strong reporting culture and
maintaining established safety standards. Mandatory training supported employees in risk exposed environments, while
efforts to harmonize occupational safety reporting procedures and improve oversight contributed to a more proactive
approach to identifying hazards and preventing workplace accidents.
Targets related to employees
Icelandair’s goal is to foster an inclusive, equitable environment that celebrates diversity, promotes equality and
accessibility, and nurtures a sense of belonging for all. Icelandair aims to promote employee satisfaction and maintain an
Employee Net Promoter Score (eNPS) of at least 20. To track progress, employee satisfaction is monitored through the
eNPS, Employer Excellence Score and Engagement Score. Additionally, Icelandair is committed to ensuring gender
diversity in management, with a target of no more than 60% of one gender in leadership positions.
Employee related metrics
Employee characteristics
Icelandair has a diverse workforce with employees representing many different skills, both personal and professional, and
they represent more than 30 different nationalities. No employee has requested to not disclose its gender or to identify as
other gender than female or male.
Number of employees (head count):
Number of employees per country (head count):
Gender
2025
2024
Male 1,950 1,990
Female
1,922
1,930
Total employees
3,872
3,920
Country
2025
2024
Iceland
3,816
3,868
Estonia
56
52
Total employees
3,872
3,920
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 73
Social, contd.
Own workforce, contd.
Employee related metrics, contd.
Total number of full time equivalent employees (FTEs) in 2025 was 3,520 down from 3,575 in 2024.
Collective bargaining coverage and workplace representation.
Gender distribution in management and top management
One of Icelandair's key sustainability focus areas is gender equality, alongside a broader commitment to equality, diversity,
and non-discrimination. Achieving gender balance across the Company’s operations remains a core priority and Icelandair
is committed to meet set goals in this area. The gender distribution presented includes members of the Executive
Committee and one level below, Directors.
Health and safety
Promoting good health among employees is high on the Company's agenda and initiatives have been launched with the
overall aim of improving the well-being of all employees. All employees are covered by the Company's health and safety
management systems.
The reported figures do not necessarily reflect a material increase in occupational accidents. While ongoing improvements
in occupational health and safety are required, the data indicates a more mature reporting culture, contributing to enhanced
transparency and reliability of incident data.
Work life balance
All employees are entitled to take family-related leave in accordance with Icelandic law. All employees are entitled to
parental leave which is a leave of absence from paid employment. The duration is 12 months in total. Each parent is entitled
to six months and six weeks are transferable. Recognizing the importance of both parents in raising kids and making it
possible for both parents to be actively involved, both at home and at work.
Male
Female
Total
Number of employees (FTE) 2025
1,870
1,649
3,520
Number of employees (FTE) 2024
1,910
1,665
3,575
Number of permanent employees (FTE)
1,756
1,433
3,189
Number of permanent employees (FTE)
1,810
1,473
3,283
Number of temporary employees
104
209
314
Number of temporary employees
92
172
263
Number of non-guaranteed hours employees
10
7
17
Number of non-guaranteed hours employees
8
20
28
Coverage rate 2025 2024 2025 2024
0-19% Estonia Estonia Estonia Estonia
20-39%
40-59%
60-79%
80-100% Iceland Iceland Iceland Iceland
Employees (EEA)
Collective bargaining coverage
Workplace representation (EEA only)
Collective bargaining coverage
Gender distribution at top management
2025
2024
Male
59% 60%
Female
41% 40%
Health and satety
2025
2024
Number of fatalities from recordable work-related accidents and work-related ill health 0 0
Number of recordable work-related accidents 325 254
Cases of recordable work-related ill health 7 0
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 74
Social, contd.
Own workforce, contd.
Employee related metrics, contd.
Remuneration metrics
All employees are covered by collective bargaining agreements, which determine the salaries for the majority of the
employees.
The gender pay gap is defined as the difference between the median salary of female and male employees. The
remuneration ratio is defined as the remuneration of the highest paid individual to the median remuneration for all
employees.
Incidents of discrimination and other human rights incidents
Value chain workers
Icelandair relies on a network of suppliers that provide essential inputs such as aircraft, fuel, maintenance, and airport
facilities. Icelandair recognizes that the well-being, safety, and working conditions of people throughout the value chain are
essential and is committed to promoting responsible and ethical practices across the value chain. In 2025, the Company
initiated work to build a more systematic approach to sustainability due diligence in the value chain. While these processes
are still under development, the Company has taken concrete first steps to strengthen how it identifies, assesses, and
follows up on potential risks. This work will continue in 2026, focusing on further maturing processes, improving follow-up
with suppliers and partners, and strengthening how identified risks are managed and addressed.
Materiality
The sustainability of the value chain is an important aspect of the Company’s operations. Value-chain workers include
employees of suppliers and contractors involved in, for example, cleaning, catering, aircraft maintenance, ground handling
and fuel supply at network airports, where these activities are not performed by Icelandair itself, as well as other upstream
service providers. Downstream workers include employees of companies that purchase and distribute Icelandair’s services
and products.
Suppliers and business partners may negatively impact human rights in the value chain. Potential adverse impacts include
poor working conditions related to working hours, living wages, health and safety, freedom of association, and
discrimination. These impacts can potentially occur among direct suppliers and further down in the value chain where
Icelandair has limited visibility.
Strikes and other labor disruptions in the value chain are assessed as a material financial risk to Icelandair. The Company’s
ability to operate its network punctually is critical to value creation and depends on efficient processes and close
cooperation with suppliers. Disruptions may cause operational delays, damage Icelandair’s reputation and lead to financial
losses through compensation payments and additional operational costs.
Policies and engagement related to value chain workers
Icelandair’s Supplier Code of Conduct (SCoC) outlines the ethical, environmental, and social standards expected from
suppliers and business partners. Suppliers are required to adhere to the SCoC, including compliance with all applicable
laws, respect for human rights, environmental stewardship, and the promotion of fair labor practices and to conduct its
business in accordance with the United Nations Guiding Principles on Business and Human Rights and the OECD
Guidelines for Multinational Enterprises on Responsible Business Conduct. The SCoC states that suppliers shall not use
any form of forced labor, compulsory labor and slavery in any form and prohibit the use or support of human trafficking.
Remuneration and pay gap
2025
2024
Gender pay gap 1:1.27 1:1.28
Remuneration ratio 8 8
Human rights incidents
2025
2024
Total number of incidents of discrimination, including harassment 29 31
Number of human rights incidents, excluding those related to discrimination 0 0
The total amount of fines, penalties, and compensation for damages recognized
during the reporting period in the financial statements for incidents of discrimination
0
0
and other human rights incidents
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 75
Social, contd.
Value chain workers, contd.
Policies and engagement related to value chain workers, contd.
Additionally, suppliers are expected to enforce a similar code of conduct and require that subcontractors and suppliers do
the same, ensuring that these standards are upheld at every level of the supply chain.
As stated in the Company’s Human Rights Policy, Icelandair works to identify and prevent adverse human rights impacts
in its value chain by securing appropriate contractual commitments and conducting risk-based supplier due diligence.
Icelandair’s Procurement Policy supports sustainable and ethical purchasing. Price and quality guide supplier selection,
but sustainability is a deciding factor when comparable options exist. Preference is given to greener products and suppliers
with recognized sustainability certifications or strong environmental and social responsibility programs.
To simplify the reporting of undesirable behavior, breach of legal obligations or other misconduct, Icelandair has
implemented a simple online announcement tool, Icelandairexternal.tilkynna.is. Anyone, including value chain workers,
can report suspect of violation of Icelandair’s policies, including any suspicion of modern slavery within the Company’s
business or supply chain. Reports can be submitted anonymously.
As stated in Icelandair’s Human Rights Policy, Icelandair is committed to providing or enabling appropriate remediation
where the company has caused or contributed to adverse impacts. Remedies are addressed case by case and provided
promptly in a timely, effective, and transparent manner. Where impacts are directly linked to the Company’s operations
through business relationships, Icelandair will support partners in addressing them through their grievance processes or,
where appropriate, through third-party remediation.
Actions and targets related to value chain workers
During 2025, Icelandair continued to strengthen its processes for identifying, preventing, and managing potential
negative impacts on workers in the value chain. The focus was to define the scope of the work and establish stronger
foundations for systematic risk assessments.
In 2025, training on due diligence was delivered to members of the Executive Committee and selected managers, and a
dedicated session was held for the procurement team. Icelandair also began reviewing how risk assessments are
applied to the selection of destinations and airline partnerships, recognizing that impacts may be linked to workers at
destinations and within partner airlines. As a result, Icelandair developed a process for sustainability risk-assessing new
partnerships and destination selection.
Additionally, Icelandair started mapping its supply chain by compiling an overview of suppliers by procurement category.
Risk screening has begun based on industry, geography, and the type of product or service provided. A supplier
questionnaire has been developed and will be sent to suppliers identified as higher risk to support assessment of
potential and actual impacts on human rights, labor rights, and the environment. As this work progresses, Icelandair will
further develop its due diligence approach to include supplier follow-up and management of identified risks.
No human rights incidents connected to value chain workers were identified during the reporting period.
Icelandair has not yet established quantitative targets related to workers in the value chain but is currently focusing on
strengthening and improving relevant processes and management practices.
Affected communities
Icelandair plays an important role in Icelandic society beyond its position as a major employer. Through its operations,
connectivity, and engagement with society, the Company contributes to Iceland’s economic and social development.
Icelandair continuously seeks to strengthen its ties to the community and, through its support of various organizations and
events, helps foster and promote Iceland’s culture and national identity.
Materiality
Icelandair has a material positive impact on Icelandic communities and contributes to economic prosperity in Iceland. As a
leading tourism company and one of Iceland’s largest employers, Icelandair contributes directly to the economy through
salaries, pension contributions, and taxes, as well as indirectly by supporting value creation across the tourism sector and
the wider economy. By connecting Iceland to international markets, Icelandair facilitates trade, tourism, and foreign
investment, including the transport of exports and imports through its cargo operations. Air connectivity also supports
access to essential services, such as healthcare, education, and emergency response, and contributes to national
cohesion in a geographically dispersed island nation where alternative transport options are limited. While not defined as
a separate sub-topic under the ESRS, Icelandair considers its impact on the Icelandic community to be material.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 76
Social, contd.
Affected communities, contd.
Actions related to affected communities
Aviation is a critical infrastructure for Iceland, and Icelandair’s flight network supports economic growth and long-term
prosperity. Research indicates that a 10% increase in flight connectivity is associated with a 0.5% increase in GDP,
highlighting the broader societal value of air transport. Icelandair contributes to these outcomes through continued
investment in connectivity and engagement with policymakers and stakeholders on the importance of sustainable and
reliable aviation.
In 2025, Icelandair continued its efforts to contribute to Icelandic society by actively engaging with key stakeholders to
ensure the continued positive economic impact of aviation and tourism in Iceland, as well as through its diverse
partnerships that reflect the Company’s strategy and approach to social responsibility and economic prosperity. This
includes long-standing support for Icelandic culture and sports, such as Iceland Airwaves and Icelandic Music Experiments
and the national sports federations. To support the development of tourism in Iceland, the Company is a founding member
of the Icelandic Tourism Fund, which invests in innovation in tourism. The Company partners with Iceland’s main volunteer
search-and-rescue team on safe travel as well as flight safety and emergency response. Furthermore, together with
contributions from its passengers, Icelandair supports the Special Children Travel Fund which gives families of children
with long-term illnesses and children who live in difficult circumstances the opportunity to travel.
Community related metrics
Icelandair contributes directly to the Icelandic economy in the form of taxes and fees paid to the government and
municipalities. The total tax footprint in Iceland in 2025 amounted to USD 322 million. The Company intends to enhance
its use of data-driven analysis to more effectively evaluate and share information about Icelandair’s impact on society and
the economy in Iceland, thereby supporting thoughtful and balanced discussion about the role of aviation.
Consumers and end users
Customer safety and well-being are top priorities for Icelandair. The company is dedicated to accessible, inclusive travel
and regularly reviews customer feedback to enhance its services.
Materiality
Consumers and end-users include Icelandair’s passengers, as well as customers of its air freight and leasing services.
Icelandair’s most material impacts on customers relate to safety, security, and social inclusion. Passenger health and safety
are the Company’s highest priorities, supported by robust risk management processes and continuous improvements to
the Safety Management System. Icelandair places strong emphasis on the protection of children, including dedicated
services for unaccompanied minors, and works to promote accessibility and non-discrimination across its services. The
Company also recognizes the risk of human trafficking associated with air travel and seeks to reduce this risk through
employee awareness and appropriate procedures.
Total tax footprint of Icelandair Group in USD thousand
Other
Other
Iceland
Countries
Total
Iceland
Countries
Total
Salary-related taxes ...................................
27,703
545
28,248
24,249
486
24,735
Pension fund contribution ..........................
59,763
44
59,807
51,267
20
51,287
Emissions Trading System (ETS) ..............
-
35,078
35,078
-
20,238
20,238
Corsia Carbon Credits ...............................
-
3,597
3,597
-
1,098
1,098
Sustainable Aviation Fuel charges (SAF) ..
-
4,399
4,399
-
-
-
Landing fees ..............................................
25,742
35,108
60,850
22,103
32,989
55,091
Other taxes ................................................
7,420
1,201
8,621
4,784
-
4,784
Companies fees
120,628
79,972
200,600
102,403
54,831
157,234
Employee income taxes ............................
131,620
385
132,005
115,008
433
115,441
Passenger taxes ........................................ 65,283 143,786 209,069 53,107 127,898 181,004
Collected taxes
196,903 144,171 341,074 168,115 128,331 296,445
Deferred payments on payroll taxes ..........
4,342
-
4,342
3,896
-
3,896
Total tax footprint
321,873
224,143
546,016
274,414
183,162
457,576
2024
2025
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 77
Social, contd.
Consumers and end users, contd.
Materiality, contd.
In addition, epidemics and pandemics represent material operational and financial risks for airlines, given their reliance on
passenger travel through international hubs. Travel restrictions imposed during such outbreaks can lead to substantial
financial losses, as seen during the COVID-19 pandemic.
Policies and engagement related to customers
As described in the Company’s Human Rights policy, Icelandair is committed to providing accessible and inclusive travel
experience for all passengers. The Company’s goal is to ensure that all passengers can travel with dignity, comfort, and
ease. Icelandair ensures that the services meet high standards of accessibility for individuals with disabilities. This includes
offering necessary assistance, accessible facilities, and clear communication to support passengers throughout their
journey. Icelandair prioritizes safety, privacy, and the protection of personal data, and strives to deliver high-quality service
that respects the dignity and individual needs of each traveler.
Icelandair works in accordance with its Customer Support guidelines and actively engages with customers and relevant
stakeholders to better understand and address their needs, including conducting large-scale surveys. Additionally,
Icelandair proactively provides customers with essential information before their journeys to ensure smooth experiences.
To identify areas for improvement, Icelandair relies on multiple feedback mechanisms such as passenger reports, customer
surveys and crew observations. Cases are reviewed to identify recurring patterns and implement meaningful
improvements. All stakeholders can report grievances through Icelandair’s external grievance mechanism
Icelandairexternal.tilkynna.is.
Icelandair is dedicated to providing appropriate remediation to harmed individuals in situations where the Company has
caused or contributed to a negative impact. Incidents are addressed on a case-by-case basis, and remedies can relate to
acknowledging issues, addressing concerns, committing to better processes, or compensation when appropriate.
Icelandair collaborates with stakeholders to resolve issues, communicates actions taken, and incorporates lessons learned
to prevent future occurrences.
Like other airlines, Icelandair is at risk of transporting victims of human trafficking. All cabin crew members receive training
on identifying and responding to potential human trafficking situations and Icelandair collaborates closely with national law
enforcement agencies to support efforts to combat human trafficking.
Actions related to material impacts on customers
At the start of the year, Icelandair reaffirmed its commitment to safeguarding the wellbeing of all customers by strengthening
its approach to health, safety, and security across the travel journey. This included continued focus on the protection of
children, heightened awareness of human-trafficking risks, and ongoing collaboration with internal and external partners
to maintain robust prevention measures. In parallel, the company restructured its customer experience team to ensure that
every service and desired experience throughout the journey had clear ownership, enhancing accountability and enabling
a more consistent and customer-centric approach.
Building on this foundation, Icelandair further advanced its work on accessibility, with efforts aimed at improving both
customer-facing information and internal service delivery. Accessibility remained a key priority across customer experience
initiatives, including the introduction of a clearly signposted, one-click pathway on the website to accessibility-related
information, making it easier for passengers with disabilities to understand available support and plan their journey. To
enhance alignment and clarity of responsibility, Icelandair established an internal cross-functional working group made up
of employees from relevant parts of the organization, tasked with aligning service objectives for passengers with disabilities
and clarifying ownership across teams.
At the same time, Icelandair reinforced internal guidance and training to support respectful and consistent interactions with
passengers with disabilities, while increasingly incorporating their feedback into customer-experience analysis to inform
continuous improvements. These efforts were supported by ongoing engagement with both internal and external
stakeholders, contributing to a more structured and proactive approach to accessibility and customer care throughout the
travel journey.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 78
Social, contd.
Consumers and end users, contd.
Targets related to customers
At Icelandair, we are dedicated to a journey of continuous improvement for all our customers. Our commitment to delivering
smooth, enjoyable, and safe travel experiences remains our priority in 2026. We actively monitor and enhance our
performance through robust key performance indicators, including Net Promoter Score (NPS), Customer Satisfaction
(CSAT) scores, and comprehensive customer feedback. These metrics are essential tools that guide our ongoing efforts
to exceed customer expectations, refine our services, and ensure every passenger’s experience reflects our high standards
of care and quality.
Governance and business conduct
Effective governance and ethical business conduct are central to Icelandair’s operations. By regularly reviewing its strategy,
policies and performance, and fostering a culture of integrity, Icelandair ensures compliance, transparency and
accountability across all levels of the Company, safeguarding trust with stakeholders and supporting long-term success.
Materiality
Corporate culture has been assessed as a key material topic, reflecting the importance of maintaining high ethical
standards. Icelandair ensures this through the implementation of policies and training programs, and regular evaluation of
employee perceptions of corporate culture through internal surveys. Animal welfare has been assessed as material, given
the potential impact of Icelandair Cargo’s transportation of animals, primarily horses. While incidents are rare, Icelandair
acknowledges its responsibility to minimize risks and ensure the welfare of animals during transit. Corruption and bribery
prevention and detection is also material for Icelandair’s operations, the Company is updating the Corruption and Bribery
Policy, the Supplier Code of Conduct, and forming dedicated training programs to mitigate risks and ensure compliance.
Icelandair is committed to safeguarding employees who report criminal offenses or other unethical conduct, in accordance
with Act No. 40/2020 on the Protection of Whistleblowers. Additionally, the Company aims to work with responsible
suppliers throughout the supply chain and is working on enhancing its procurement practices to qualify and monitor
suppliers in a systematic way.
Corporate culture and business conduct policies and processes
Icelandair manages its material impacts through various policies and processes, including the Anti-corruption and Anti-
bribery Policy, Code of Ethics, Procurement Policy, Rules on Whistleblowing and Supplier Code of Conduct.
Icelandair requires all new employees to formally certify their compliance with the Anti-Corruption and Anti-Bribery policy.
The policy describes Icelandair’s processes for identifying and managing bribery and corruption risks in the Company’s
operations. Certain functions pose elevated risks for corruption and bribery due to their involvement in critical financial
transactions and interactions with external stakeholders, such as procurement, hiring, finance, and senior management.
Icelandair’s Climate and Environmental Policy recognizes the Company’s responsibility to ensure the safe and humane
transport of animals. This commitment also includes a zero-tolerance approach to illegal wildlife trade and trafficking, a
growing global concern that threatens biodiversity and animal welfare. Icelandair supports relevant industry initiatives to
help prevent these activities and promotes safe, respectful transportation of animals in line with applicable animal welfare
standards.
Through the Supplier Code of Conduct, suppliers are required to ensure that materials are ethically sourced, in compliance
with international human rights and environmental standards. Icelandair requires that its suppliers comply with ethical
standards that reflect the same standards that Icelandair complies to within its own operations. The Company is in the
process of centralizing and improving procurement functions across all operations. A part of these efforts is to enhance the
sustainability due diligence process and integrate sustainability into the Company’s procurement practices
Concerns regarding unlawful behavior or policy violations can be reported anonymously via tilkynna.is, through
supervisors, or to the Compliance Officer. The Company’s promise to protect whistleblowers against retaliation is outlined
in the Whistleblowing policy. Icelandair is committed to prompt and impartial investigations, with People and Culture
managing initial reports and engaging relevant parties as needed. Investigators operate independently of the management
chain to ensure objectivity.
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 79
Governance and business conduct, contd.
Actions related to business conduct
Management and relationship with suppliers
Icelandair’s Procurement Policy supports sustainable and ethical purchasing. Price and quality guide supplier selection,
but sustainability is a deciding factor when comparable options exist. Preference is given to greener products and suppliers
with recognized sustainability certifications or strong environmental and social responsibility programs. In 2025, training on
due diligence was delivered to members of the Executive Committee and selected managers, and a dedicated session
was held for the procurement team. Icelandair has also started to risk assessing its suppliers based on risk country and
category and covers Tier 1 suppliers. Further information on actions related to suppliers is described under Workers in the
value chain.
Corruption and bribery
Any act of corruption or bribery, or conduct that may contravene applicable laws or Icelandair’s policies, must be reported.
Reports can be submitted through Icelandairexternal.tilkynna.is or directly to the Compliance Officer. Icelandair is
committed to prompt, fair, and impartial investigations. Reports are managed by the Compliance Officer, with relevant
parties engaged as appropriate, and investigations are conducted independently of the management chain to ensure
objectivity.
Metrics related to business conduct
In 2025, there were no convictions for violations of anti-corruption and anti-bribery laws.
Icelandair’s Procurement policy outlines payment practices, specifying payment terms of 45 days for all supplier categories
except for fuel suppliers. There are no specific or unique supplier payment terms for SMEs. As of 2025, there were no
outstanding legal proceedings related to late payments.
ESG Accounting
Environmental Metrics
E1 GhG Emissions
Units
2025
2024
Total amount, in CO2 equivalents, for Scope 1 tCO2e 1,211,974 1,167,660
Total amount, in CO2 equivalents, for Scope 2 tCO2e 152 168
Total amount, in CO2 equivalents, for Scope 3 tCO2e 56 89
E2 Emissions Intensity
Total GhG emission per output scaling factor tCO2e per FTEs 344 327
tCO2e per
passenger
0.24 0.25
Total CO2 emissions per scaling factor CO2 per OTK 0.7 0.73
E3 Energy Usage
Total amount of energy directly consumed (fossil fuels) MWh 4,632,215 4,479,737
Total amount of energy indirectly consumed (electricity and heat) MWh 17,448 21,519
E4 Energy Intensity
Total direct energy usage per output scaling factor MWh per FTEs 1,319.00 1,259.00
MWh per
passenger
0.920 0.960
E5 Energy Mix
Non renewable energy (fossil fuels are the primary energy source) % 99.6% 99.5%
Renewable energy % 0.4% 0.5%
E6 Water Usage
Total amount of water consumed m3 227,527 302,770
Total amount of water reclaimed m3 - -
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 80
ESG Accounting, contd.
Environmental Metrics, contd.
Social data metrics
E7 Environmental Operations
Units
2025
2024
Does your company follow a formal Environmental Policy Yes/No Yes Yes
Yes/No Yes Yes
Yes/No Yes Yes
E8 Climate Oversight / Board
Yes/No No No
E9 Climate Oversight / Management
Yes/No Yes Yes
E10 Climate Risk Mitigation
ISK - -
Does your company use a recognized energy management system
Does your Board of Directors oversee and/or manage
climate-related risks
Does your Senior Management Team oversee and/or
manage climate-related risks
Total amount invested, annually, in climate-related infrastructure,
resilience, and product development
Does your company follow specific waste, water, energy,
and/or recycling policies
S1 CEO Pay ratio
ratio 8 8
Yes/No Yes Yes
S2 Gender Pay Ratio
Median male compensation to median female compensation ratio 1:1,27 1:1,28
S3 Employee Turnover
Year-over-year change for full-time employees % - 7%
S4 Gender Diversity
Total enterprise headcount held
by men and women
men/women (%) 55/45 53/47
Entry- and mid- level positions held by men and women men/women (%) - -
men/women (%) 59/41 60/40
S5 Temporary Worker Ratio
women/men% - -
women/men% - -
S6 Non-Discrimination
Yes/No Yes Yes
S7 Injury Rate
- -
S8 Global Health & Safety
Yes/No Yes Yes
Does your company follow an occupational health and/or global health
& safety policy
Does your company follow a sexual harassment and/or non-
discrimination policy
Frequency of injury events relative to total workforce time
CEO total compensation to median FTE total compensation
Does your company report this metric in regulatory filings
Senior- and executive-level positions held by men and women
Total enterprise headcount held by part-time employees
Total enterprise headcount held by contractors and/or consultants
Non-Financial Reporting, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 81
ESG Accounting, contd.
Social data metrics, contd.
Governance Metrics
S9 Child & Forced Labour
Units
2025
2024
Yes/No Part of CoC Part of CoC
Yes/No Part of SCoC Part of SCoC
S10 Human Rights
Yes/No Yes Yes
Yes/No Yes Yes
Does your company follow a child and/or forced labour policy
If yes, does your child and/or forced labor policy also cover suppliers
and vendors
Does your company follow a human rights policy
If yes, does your human rights policy also cover suppliers and vendors
G1 Board Diversity
% 40% 40%
% 25% 0%
G2 Board Independence
Yes/No Yes Yes
% 80% 80%
G3 Incentivized Pay
Yes/No No No
G4 Collective Bargaining
% 99% 99%
G5 Supplier Code of Conduct
Yes/No Yes Yes
G6 Ethics & Anti-Corruption
Yes/No Yes Yes
%
100% of new
employees
100% of new
employees
G7 Data Privacy
Yes/No Yes Yes
Yes/No Yes Yes
G8 ESG Reporting
Yes/No Yes Yes
Yes/No Yes Yes
G9 Disclosure Practices
Yes/No Yes Yes
Yes/No Yes Yes
Yes/No Yes Yes
G10 External Assurance
Yes/No No No
Is sustainability data included in your regulatory filings
Does your company provide sustainability data to sustainability
reporting frameworks ?
Does your company focus on specific UN Sustainable Development
Goals (SDGs)
Does your company set targets and report progress on the UN SDGs
Are your sustainability disclosures assured or validated by a third party
Are your vendors or suppliers required to follow a Code of Conduct
Does your company follow an Ethics and/or Anti-Corruption policy
If yes, what percentage of your workforce has formally certified its
compliance with the policy
Does your company follow a Data Privacy policy
Has your company taken steps to comply with GDPR rules
Does your company publish a sustainability report
Committee chairs occupied by women (as compared to men)
Does company prohibit CEO from serving as board chair
Total board seats occupied by independants
Are executives formally incentivized to perform on sustainability
Total enterprise headcount covered by collective bargaining agreements
Total board seats occupied by women (as compared to men)
Consolidated Financial Statements of Icelandair Group hf. 2025 82
Operational Risk
Overview
The Group considers the following to be its main operational risks as at year-end 2025:
- macroeconomic and competition risk - safety and security risk
- regulatory risk - environmental and sustainability risk
- technical risk - labor market risk
- reputational risk
Macroeconomic and competition risk
Icelandair Group operates an international passenger airline and route network as well as ground handling, maintenance,
cargo, and charter operations. The Company’s business, and demand for its services are therefore highly susceptible to
general macroeconomic conditions in all its markets. A slowing economy, whether globally or locally, might decrease
consumer spending e.g., in the event of lower employment levels, higher interest and/or inflation rates, diminished access
to credit, or exchange rates fluctuations. All this can adversely affect the Company's operations and financial standing. The
Company cannot guarantee that its liquidity and access to acceptably priced financing will always be sufficient or unaffected
by external macroeconomic trends or financial market volatility, whether global or domestic. This in turn might have
subsequent implications for loan covenants, the Company’s financing costs, fair value of assets and overall financial
condition.
Uncertain economic and, as a result financial market conditions, can affect jet fuel prices, interest rates and currency
exchange rates as was the case in 2025 with continued geopolitical unrest and relatively high inflation. Financial markets
were particularly volatile as international trade was put in a tailspin following announced tariffs changes by the U.S.
government in early April. This in turn greatly impacted the EUR/USD exchange rate with a sharp weakening in the USD
against all major currencies as well as the ISK. The latter was exacerbated by certain structural imbalances resulting in a
substantially lower USD/ISK exchange rate, vis-à-vis 2024, throughout the year. Icelandair, as indeed all export companies,
is particularly vulnerable to a strong ISK as the Group’s functional currency is the USD while salaries are payable in ISK.
Oil markets were no less volatile were we saw crude drop to a four-year low within the year.
Competition amongst airlines is high which heavily influences pricing decisions. In general, the airline industry is
susceptible to fare discounting due to the low marginal costs of adding passengers to otherwise empty seats. New market
entrants, especially low-cost carriers, mergers, acquisitions, consolidations, new partnerships, and transparency of pricing
in the air travel market are examples of factors influencing competition. Unless the Group can offer a competitive product,
it stands the risk of not meeting its revenue and profit targets. 2025 saw a slight correction in capacity to and from Keflavík
airport, Icelandair’s hub and home. Most noteworthy in that respect was the discontinuation of the operations of Play
airlines in late September.
The Group monitors trends and demand in its key markets closely through regular surveys and discussions with trade
partners. The Company further imposes strict cost control in all its operations to stay competitive while safeguarding its
ability to offer attractive value propositions to its customers.
Safety and security risk
The loss or grounding of an aircraft, such as due to an accident, design defects or operational malfunction would cause
significant losses for the Group and impact its reputation and customer confidence. Such incidents and wreckages can be
the result of various factors ranging from human error or misconduct to adverse or extreme weather to deferred
maintenance. Should this risk materialize, it would bring about both direct costs such as repair or replacement costs and
passenger claims as well as indirect costs such as the potentially poorer perception of the safety of the Company’s chosen
fleet.
Demand for airline travel is moreover highly vulnerable to events outside the Company's control such as natural disasters,
terrorist attacks, armed conflicts, and pandemics. Such events could individually or collectively cause disruptions to flight
schedules that in extreme cases can lead to prolonged suspension of certain routes and closure of airports as well as the
future operational environment and regulatory burden of airlines. Seismic activity was ongoing on the Reykjanes Peninsula
in 2025 which saw two eruptions within the year. Neither Keflavík airport nor the Company’s flight schedule was affected
by the events and their effect on the Company’s revenue generation is estimated to have been immaterial.
It is worth mentioning that the acute nature of such events, should they materialize, may limit the Company's ability to
mitigate the associated risks. In this respect it is important to note that the airport itself is not situated on an active volcanic
system. Disruptions would therefore likely be limited to or associated with temporary loss of electricity or water supplies.
Operational Risk, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 83
Safety and security risk, contd.
The Company has in previous crisis demonstrated a high level of flexibility and resilience that has allowed the Company
to withstand short to medium-term demand shocks. The Company has in place, and regularly reviews, safety measures,
emergency response protocols and working procedures that prioritize the safety and security of its passengers and staff,
which is at the heart of the Company’s operations.
Regulatory risk
Regulatory risk refers to the potential financial and operational impacts that changes in government regulations can have
on the airline industry. This can include changes in safety regulations, environmental and sustainability regulations, and
rules surrounding air traffic control, among others. Airlines must constantly monitor and adapt to these regulatory changes,
which can be costly and time-consuming. Additionally, non-compliance with regulations can result in fines and penalties,
further adding to the financial risks faced by the industry.
An evolving and growing issue for airlines is government regulations aimed at environmental protection such as taxation
on jet fuel, mandates on implementing SAF et.al. to reach goals of reducing carbon emissions. Icelandair has received
free EU ETS carbon allowances since the scheme began in 2012, though these have been gradually phased out and the
phase-out accelerated in 2024. Under a special agreement between Iceland and the EU, flights to and from Keflavík qualify
for a slower reduction in free allowances due to Iceland’s geographic position. Even so, Icelandair received 7% fewer free
allowances in 2025 than in 2024, and 2026 is expected to be the final year it receives any.
Moreover, the industry is subject to various local restrictions around airports such as to reduce noise and pollution. This
can concern opening hours of airports, availability of slots and the usage of airspace. Congestion and environmental
restrictions can for example lead to delays or increase the complexity of departure and approach maneuvers which may
act to reduce productivity and increase costs.
The airline and tourism industries are subject to numerous fees and charges as well as an everchanging tax environment,
which can have a direct effect on ticket pricing and demand. Examples of airline specific costs are take-off, transit and
landing fees, noise, navigation, and emission charges in addition to value added tax. Unless mitigated through higher
pricing these taxes act to increase operating costs.
Icelandair is a member of IATA and Airlines for Europe (A4E) that guard the interests of airlines and provide input on their
behalf to local, national, and supra-national governmental bodies on policy frameworks regarding the above issues.
Icelandair further endeavors to maintain good relations with airport operators and the Icelandic government with the same
objective.
The Company's shares are traded on Nasdaq Iceland’s Regulated Market. The Company is therefore subject to the
Icelandic Securities Transactions Act and subsequent regulations as well as Nasdaq Iceland's Rules for Issuers. Violation
of these provisions, whether intended or unintentional, could have adverse financial impact on the Company. Serious
breaches may result in penalties and Nasdaq Iceland halting trading in the shares. Icelandair has a Compliance Officer
and compliance processes in place to mitigate the risk of any breaches. The Company further maintains a good relationship
with its oversight authority, the Financial Supervisory Authority – Iceland.
Environmental and sustainability risk
Climate change poses significant financial risks to the aviation industry. The effects include both physical risks such as
flight delays or airport closures and related costs, as well as contractual, regulatory, and legal compliance risks. In the
shorter-term, risks are more likely to be associated with disruptive events, such as extreme weather events like storms or
extreme heat, which can lead to delays, cancellations, and infrastructure damage. In the longer-term, gradual but persistent
impacts, such as temperature change or sea level rise, may lead to business and wider macro-economic effects such as
changes in tourist demand and damage or loss of infrastructure.
Rising costs of carbon offsetting, such as through the EU, UK and Swiss Emissions Trading System, and the bid for
sustainable growth requires the Company to address its environmental impact, both globally and locally. As part of this
effort, the Company participates in the work of various environmental working groups, such as with IATA and Airlines for
Europe (A4E). A4E’s goal is to ensure the sustainable growth of aviation and contribute positively to the socioeconomic
development of European nations. Among actions taken by Icelandair are setting new medium- and long-term targets to
reduce CO2 emissions from flight operations and setting up action plans to achieve those targets. Action plans relate to
sustainable aviation fuels, operational improvements, fleet renewal, new technology and carbon compensation. Icelandair
Group participates in the CORSIA emission mitigation scheme. 2026 marks the first year of procurement of CORSIA credits
which will be retired by year-end 2027 to compensate for emissions for the years 2024-2026.
Operational Risk, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 84 Amounts are in USD thousands
Environmental and sustainability risk, contd.
The ultimate costs borne by airlines in respect of environmental and sustainability factors will be determined by the chosen
methods imposed by governments and/or supra-national bodies to combat climate change. These are likely to include a
mix of economic, political, and social measures. The pace of the demand for transition to more sustainable energy sources
and other mitigating measures will determine the magnitude of impacts to the business.
Technical risk
The Company's operations are dependent on IT and other systems. Failure or disruption to IT, financial or management
systems, whether internal or external, could affect the Company’s ability to carry out its daily operations and services to its
customers. Many factors that can cause such systems to fail are outside the Company's control.
Icelandair Group makes every effort to minimize the risk of disruption with the aim of securing the Company's business
continuity. Among measures that the Company has in place are documented procedures regarding access to information
and other systems, the back-up and storing of data, remote access via virtual private network clients and the disposal of
confidential or otherwise sensitive material. Virus protection for all computers and servers is centrally managed, internet
connectivity is secured by firewalls and web security gateways, and all services open for external usage are secured by
an application firewall. The Company offers regular seminars to its employees to guard against fraud and phishing e-mail
attempts.
The Company collects and retains personal information received from customers and is therefore subject to the EU's
General Data Protection Regulation (EU) 2016/679 (“GDPR”) aimed at protecting personal data held by businesses and
other organizations. These requirements include but are not limited to implementing certain policies and processes,
developing an effective internal data protection management system, and appointing a data protection officer. If found non-
compliant to the GDPR regulators can, determined by the level of the infringement, levy fines of up to 4% of a company’s
annual worldwide turnover. The Executive Committee considers the Company to be GDPR compliant.
Labor market risk
The airline and tourism industries are inherently labor-intensive industries. Most of the Company's employees are
unionized; and represented by several unions, each of which has its own collective agreement on salaries and benefits
with the Group's companies. Each union's contract comes up for renegotiation every few years, bringing with it a risk that
the parties will not reach an immediate agreement, resulting in a jeopardy of production disruptions through strikes. In 2020
the Company signed new long-term wage agreements with its cabin crew, pilots and aircraft mechanics’ which collectively
make up the vast majority of the Company’s employees. These agreements were up for renewal in the second half of 2025.
Negotiations are underway but no new agreements had been reached at year-end 2025. The Company seeks to maintain
good relations with its union representatives through active dialogue and regular meetings to foster a culture of mutual
respect and understanding.
Reputational risk
The Group is subject to various risks that can lead to disruptions and interruptions to flight schedules. These include
computer faults, accidents, labor unrest, weather conditions, delays by service providers, congestion, and unexpected
maintenance. Additionally, increased focus on sustainability factors requires the Company to address its environmental
and social impact, both globally and locally.
Serious or repeated interruptions to services, or a perception that the Company is not conducting itself in a socially or
environmentally responsible manner, can result in a decline in demand for the Company's products and services thus
hurting revenue generation. It further brings on the risk of tarnishing the Company's reputation and/or its individual brand
names that might take a long time to repair.
Consolidated Financial Statements of Icelandair Group hf. 2025 85 Amounts are in USD thousands
Quarterly Statement
Unaudited summary of the Group's operating results by quarters:
Year 2025
Q1
Q2
Q3
Q4
Total
Operating income
207,988
386,000
513,589
315,817
1,423,394
6,039
7,047
8,514
8,132
29,732
214,027
393,047
522,103
323,949
1,453,126
21,053
19,124
18,201
21,352
79,730
28,595
30,252
22,120
30,285
111,252
14,429 11,165 9,628 12,483 47,705
1,406 945 1,509 1,626 5,486
1,644 2,601 3,915 2,377 10,537
14 93 370 9,632 10,109
5,283 5,471 7,414 4,773 22,941
22,776
20,275
22,836
30,891
96,778
286,451
462,698
585,260
406,477
1,740,886
Operating expenses
71,497
95,721
93,665
96,814
357,697
12,202
15,862
15,799
15,944
59,807
8,507
12,563
5,264
11,561
37,895
92,206
124,146
114,728
124,319
455,399
55,209
84,076
104,306
68,487
312,078
4,114
5,611
12,006
13,347
35,078
254
460
554
2,329
3,597
638
1,263
1,437
1,061
4,399
1,850
4,094
321
1,070 )
(
5,195
62,065
95,503
118,624
84,155
360,347
342
327
4,363
118 )
(
4,914
30,604
52,235
60,975
40,456
184,270
29,643
41,697
41,821
38,959
152,120
60,589
94,259
107,159
79,297
341,304
18,392
22,050
23,327
19,987
83,756
10,667
8,642
7,791
8,730
35,830
8,151
9,207
11,525
10,551
39,434
7,202
7,560
4,981
5,883
25,626
13,437
18,366
26,492
17,646
75,941
20,948
25,045
32,950
25,824
104,767
2,172
2,623
1,441
2,538
8,774
190
183
127
222 )
(
278
13,245
10,910
15,455
13,246
52,856
94,404
104,586
124,089
104,183
427,262
309,264 418,494 464,600 391,954 1,584,312
22,813)( 44,204 120,660 14,523 156,574 Operating (loss) profit bef. depr. (EBITDA) ...
Leasing revenue ................................................
Passenger revenue ............................................
Ancillary revenue ...............................................
Total Passanger revenue ...................................
Sale at airport ....................................................
Revenue from tourism .......................................
Aircraft handling .................................................
Aircraft fuel ........................................................
Gain on sale of operating assets .......................
Other operating revenue ....................................
Total other operating revenue ............................
Salaries ..............................................................
Contributions to pension funds ..........................
Other salary-related expenses ...........................
Total operating income ......................................
Total salaries and salary related expenses .......
Emissions Trading System (ETS) ......................
Fuel hedges .......................................................
Total aircraft fuel cost ........................................
Aircraft and engine lease ...................................
Aircraft handling, landing and navigation ...........
Aircraft maintenance expenses .........................
Total other aviation expenses ............................
Operating cost of real estate and fixtures ..........
Other operating expenses .................................
Travel and other employee expenses ................
Tourism expenses .............................................
Allowance for bad debt ......................................
Total operating expenses ...............................
Total other operating expenses .........................
IT expenses .......................................................
Advertising .........................................................
Booking fees and commission expenses ..........
Customer services .............................................
Cargo revenue ...................................................
Corsia Carbon Credits .......................................
Sustainable Aviation Fuel chargers (SAF) .........
Quarterly Statement, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 86 Amounts are in USD thousands
Year 2025, contd. Q1 Q2 Q3 Q4 Total
23,284
25,348
27,146
25,277
101,055
15,914
17,689
18,847
19,006
71,456
260
390
313
339
1,302
39,458
43,427
46,306
44,622
173,813
62,271)( 777 74,354 30,099)( 17,239)(
6,111
7,277
6,917
7,405
27,710
453
478
444
411
1,786
646
1,188
548
2,876
5,258
5,158
7,699
589
6,527 )
(
6,919
12,368
16,642
8,498
4,165
41,673
3,015 )
(
2,684 )
(
2,686 )
(
2,368 )
(
10,753 )
(
6,386 )
(
7,773 )
(
8,138 )
(
7,946 )
(
30,243 )
(
273 )
(
0
243 )
(
6,887 )
(
7,403 )
(
9,674 )
(
11,467 )
(
11,067 )
(
17,201 )
(
48,399 )
(
2,694 5,175 2,569 )( 13,036 )( 6,726 )(
310
1,049
300
1,946
3,605
59,267)( 7,001 72,085 41,189)( 20,360)(
15,182
5,922
14,803)
(
4,532
10,833
44,085)
(
12,923
57,282
36,657)
(
9,527)
(
16,105
28,646
2,340)
(
17,377)
(
25,034
27,980)
(
41,569
54,942
54,034)
(
15,507
204,714
118,021
26,155)
(
8,432
305,012
27,866)
(
74,576)
(
26,343)
(
49,016 )
(
177,801)
(
25,822)
(
29,536)
(
28,629)
(
21,716 )
(
105,703)
(
Income tax .........................................................
Operating (loss) profit (EBIT) ..........................
Share of profit of associates ..............................
(Loss) profit before tax (EBT) .........................
(Loss) profit for the period ..............................
Other comprehensive income (loss) ..............
Total comprehensive (loss) income ...............
Net cash from (used in) operating activities ......
Net cash used in financing activities ..................
Net cash (used in) from investing activities .......
Interest income on lease receivables ................
Depreciation of operating assets .......................
Depreciation of right-of-use assets ....................
Net finance cost ...............................................
Other interest expenses .....................................
Finance costs total .............................................
Other interest income ........................................
Net currency exchange (loss) gain ....................
Finance income total .........................................
Interest expenses on loans and borrowings ......
Interest on lease liabilities .................................
Interest income on cash and cash equivalents
Amortization of intangible assets .......................
Depreciation and amortization ...........................
and marketable securities ................................
Quarterly Statement, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 87 Amounts are in USD thousands
Unaudited summary of the Group's operating results by quarters:
Year 2024
Q1
Q2
Q3
Q4
Total
Operating income
183,960
330,178
466,431
318,394
1,298,963
14,902
23,005
30,027
41,814 )
(
26,120
198,862
353,183
496,458
276,580
1,325,083
20,696
16,885
16,944
22,211
76,736
19,328
20,654
23,188
30,561
93,731
12,047 10,376 6,287 11,452 40,162
1,359 1,218 1,149 1,183 4,909
1,201 2,483 3,256 1,870 8,810
31 42 1,106 119 1,298
5,437 4,542 5,094 4,805 19,878
20,075 18,661 16,892 19,429 75,057
258,961
409,383
553,482
348,781
1,570,607
Operating expenses
72,333
83,129
84,455
81,435
321,352
11,964
13,466
13,392
12,465
51,287
10,195
10,373
3,822
9,001
33,391
94,492
106,968
101,669
102,901
406,030
62,156
89,926
113,076
65,253
330,411
3,087
5,602
7,590
3,959
20,238
0
0
0
1,098
1,098
1,155 )
(
1,003
4,364
4,241
8,453
64,088
96,531
125,030
74,551
360,200
1,122
529
2,886
45 )
(
4,492
29,077
42,181
56,773
37,371
165,402
24,373
31,136
35,370
31,367
122,246
54,572
73,846
95,029
68,693
292,140
15,622
19,689
19,771
16,580
71,662
9,331
7,990
4,310
9,094
30,725
8,926
7,942
9,871
9,222
35,961
7,739
5,710
4,761
5,893
24,103
11,985
17,018
25,513
14,332
68,848
15,071
21,401
28,323
24,433
89,228
2,701
2,314
1,965
2,564
9,544
514
33
615
254
1,416
9,251
9,371
10,552
11,720
40,894
81,140
91,468
105,681
94,092
372,381
294,292 368,813 427,409 340,237 1,430,751
35,331)( 40,570 126,073 8,544 139,856
Total Other Operating expenses ........................
Total operating expenses ...............................
Operating (loss) profit bef. depr. (EBITDA) ...
Other Operating expenses .................................
Aircraft maintenance expenses .........................
Total Other aviation expenses ...........................
Travel and other employee expenses ................
Tourism expenses .............................................
IT expenses .......................................................
Advertising .........................................................
Booking fees and commission expenses ..........
Customer services .............................................
Operating cost of real estate and fixtures ..........
Allowance for bad debt ......................................
Aircraft handling, landing and navigation ...........
Total Other operating revenue ...........................
Total other operating income .........................
Salaries ..............................................................
Contributions to pension funds ..........................
Other salary-related expenses ...........................
Total salaries and salary related expenses .......
Aircraft fuel ........................................................
Emissions Trading System (ETS) ......................
Fuel hedges .......................................................
Total Aircraft fuel cost ........................................
Aircraft and engine lease ...................................
Corsia Carbon Credits .......................................
Other operating revenue ....................................
Passenger revenue ............................................
Ancillary revenue ...............................................
Total Passanger revenue ...................................
Cargo revenue ...................................................
Leasing revenue ................................................
Revenue from tourism .......................................
Sale at airport ....................................................
Aircraft handling .................................................
Gain on sale of operating assets .......................
Quarterly Statement, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 88 Amounts are in USD thousands
Year 2024, contd. Q1 Q2 Q3 Q4 Total
20,547
23,632
27,829
24,503
96,511
12,875
13,506
14,630
15,959
56,970
139
123
137
187
586
33,561
37,261
42,596
40,649
154,067
68,892)( 3,309 83,477 32,105)( 14,211)(
6,247
6,884
5,779
4,937
23,847
338
818
616
581
2,353
1,462
1,266
1,481
1,092
5,301
8,047
8,968
7,876
6,610
31,501
4,124 )
(
4,008 )
(
3,850 )
(
3,502 )
(
15,484 )
(
4,752 )
(
5,980 )
(
5,724 )
(
5,979 )
(
22,435 )
(
1,396 )
(
631 )
(
347 )
(
768 )
(
3,142 )
(
1,081 )
(
488 )
(
268
408 )
(
1,709 )
(
11,353 )
(
11,107 )
(
9,653 )
(
10,657 )
(
42,770 )
(
3,306 )( 2,139 )( 1,777 )( 4,047 )( 11,269 )(
457)
(
646)
(
1,370
406
673
72,655)( 524 83,070 35,746)( 24,807)(
13,238
98
13,869)
(
5,171
4,638
59,417)
(
622
69,201
30,575)
(
20,169)
(
4,220 1,480)( 5,025)( 2,294 9
55,197)( 858)( 64,176 28,281)( 20,160)(
147,102
110,243
48,008)
(
11,820
221,157
10,537)
(
102,284)
(
48,456)
(
3,520 )
(
164,797)
(
26,502)
(
26,100)
(
24,715)
(
28,073 )
(
105,390)
(
Total comprehensive (loss) income ...............
Net cash from (used in) operating activities ......
Net cash (used in) from investing activities .......
Net cash used in financing activities ..................
Share of loss of associates ................................
(Loss) profit before tax (EBT) .........................
Income tax .........................................................
(Loss) profit for the period ..............................
Other comprehensive income (loss) ..............
Net finance cost ...............................................
Interest income on lease receivables ................
Other interest income ........................................
Finance income total .........................................
Interest expenses on loans and borrowings ......
Interest on lease liabilities .................................
Other interest expenses .....................................
Net currency exchange (loss) gain ....................
Finance costs total .............................................
and marketable securities ................................
Depreciation of operating assets .......................
Depreciation of right-of-use assets ....................
Amortization of intangible assets .......................
Depreciation and amortization ...........................
Operating (loss) profit (EBIT) ..........................
Interest income on cash and cash equivalents
Quarterly Statement, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 89 Amounts are in USD thousands
Unaudited summary of the Group's operating results by quarters:
2025
2024
2025
2024
Q4 2025 vs. Q4 2024
Q4 Q4 YTD YTD
Operating income
315,817
255,219
1,423,394
1,298,963
8,132
21,361
29,732
26,120
323,949
276,580
1,453,126
1,325,083
21,352 22,211 79,730 76,736
30,285
30,561
111,252
93,731
12,483
11,452
47,705
40,162
1,626
1,183
5,486
4,909
2,377
1,870
10,537
8,810
9,632
119
10,109
1,298
4,773
4,805
22,941
19,878
30,891 19,429 96,778 75,057
406,477
348,781
1,740,886
1,570,607
Operating expenses
96,814
81,435
357,697
321,352
15,944
12,465
59,807
51,287
11,561
9,001
37,895
33,391
124,319
102,901
455,399
406,030
68,487
65,253
312,078
330,411
13,347
3,959
35,078
20,238
2,329
1,098
3,597
1,098
1,061
0
4,399
0
1,070 )
(
4,241
5,195
8,453
84,155
74,551
360,347
360,200
118 )
(
45 )
(
4,914
4,492
40,456
37,371
184,270
165,402
38,959
31,367
152,120
122,246
79,297
68,693
341,304
292,140
19,987
16,580
83,756
71,662
8,730
9,094
35,830
30,725
10,551
9,222
39,434
35,961
5,883
5,893
25,626
24,103
17,646
14,332
75,941
68,848
25,824
24,433
104,767
89,228
2,538
2,564
8,774
9,544
222 )
(
254
278
1,416
13,246
11,720
52,856
40,894
104,183
94,092
427,262
372,381
391,954
340,237
1,584,312
1,430,751
14,523
8,544
156,574
139,856
Corsia Carbon Credits ............................................................
Total Passanger revenue ........................................................
Cargo revenue ........................................................................
Customer services ..................................................................
Total operating expenses ....................................................
Operating cost of real estate and fixtures ...............................
Allowance for bad debt ...........................................................
Total Other Operating expenses .............................................
Tourism expenses ..................................................................
IT expenses ............................................................................
Advertising ..............................................................................
Booking fees and commission expenses ...............................
Emissions Trading System (ETS) ...........................................
Gain on sale of operating assets ............................................
Other operating revenue .........................................................
Total Other operating revenue ................................................
Total other operating income ..............................................
Salaries ...................................................................................
Contributions to pension funds ...............................................
Other salary-related expenses ................................................
Total salaries and salary related expenses ............................
Operating profit (loss) bef. depr. (EBITDA) ........................
Other Operating expenses ......................................................
Aircraft maintenance expenses ..............................................
Total Other aviation expenses ................................................
Travel and other employee expenses .....................................
Aircraft and engine lease ........................................................
Aircraft handling, landing and navigation ................................
Revenue from tourism ............................................................
Sale at airport .........................................................................
Aircraft handling ......................................................................
Leasing revenue .....................................................................
Aircraft fuel .............................................................................
Sustainable Aviation Fuel charges (SAF) ...............................
Fuel hedges ............................................................................
Total Aircraft fuel cost .............................................................
Passenger revenue ................................................................
Ancillary revenue ....................................................................
Quarterly Statement, contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 90 Amounts are in USD thousands
2025
2024
2025
2024
Q4 2025 vs. Q4 2024, contd.
Q4 Q4 YTD YTD
25,277
24,503
101,055
96,511
19,006
15,959
71,456
56,970
339
187
1,302
586
44,622
40,649
173,813
154,067
30,099)
(
32,105)
(
17,239)
(
14,211)
(
7,405
4,937
27,710
23,847
411
581
1,786
2,353
2,876
1,092
5,258
5,301
6,527 )
(
0
6,919
0
4,165
6,610
41,673
31,501
2,368 )
(
3,502 )
(
10,753 )
(
15,484 )
(
7,946 )
(
5,979 )
(
30,243 )
(
22,435 )
(
6,887 )
(
768 )
(
7,403 )
(
3,142 )
(
0
408 )
(
0
1,709 )
(
17,201 )
(
10,657 )
(
48,399 )
(
42,770 )
(
13,036 )( 4,047 )( 6,726 )( 11,269 )(
1,946
406
3,605
673
41,189)
(
35,746)
(
20,360)
(
24,807)
(
4,532
5,171
10,833
4,638
36,657)
(
30,575)
(
9,527)
(
20,169)
(
17,377)
(
2,294
25,034
9
54,034)( 28,281)( 15,507 20,160)(
8,432
11,820
305,012
221,157
49,016 )
(
3,520)
(
177,801 )
(
164,797)
(
21,716 )
(
28,073)
(
105,703 )
(
105,390)
(
Net cash from (used in) operating activities ...........................
Net cash from (used in) investing activities ............................
Net cash used in financing activities .......................................
Total comprehensive (loss) income ....................................
Interest income on lease receivables .....................................
Other interest income .............................................................
Net currency exchange gain ...................................................
Finance income total ..............................................................
Interest expenses on loans and borrowings ...........................
Interest on lease liabilities ......................................................
Other interest expenses ..........................................................
Net currency exchange (loss) gain .........................................
Finance costs total ..................................................................
(Loss) profit before tax (EBT) ..............................................
(Loss) profit for the period ...................................................
Other comprehensive income (loss) ...................................
Operating (loss) profit (EBIT) ..............................................
Depreciation of operating assets ............................................
Depreciation of right-of-use assets .........................................
Income tax ..............................................................................
Net finance cost ....................................................................
Share of loss of associates .....................................................
Interest income on cash and cash equivalents
Amortization of intangible assets ............................................
Depreciation and amortization ................................................
and marketable securities .....................................................
Consolidated Financial Statements of Icelandair Group hf. 2025 91
Alternative performance measures (APMs)
2025
2024
2025
2024
Traffic
Q4 Q4 YTD YTD
4,173
3,729
18,520
17,158
8.78
8.40
9.01
8.90
84.3%
0.83
83.5%
0.83
7.41
7.03
7.53
7.40
8.05
7.60
8.06
7.92
9.02
8.80
8.33
8.17
7.13 7.00 6.49 6.20
3,516
3,107
15,470
14,180
1,155
1,021
5,061
4,666
0.83
0.76
0.84
0.83
4,390
3,964
19,455
18,331
3,023
3,024
3,035
2,999
7,250
6,604
27,515
21,236
37,629
41,766
138,298
140,665
273
256
1,210
1,166
0.68
0.71
0.70
0.73
Passenger mix ('000)
371
331
1,737
1,518
230
187
896
773
488
440
2,168
2,114
65
63
260
261
2025 2024
Capital structure
31.12 31.12
365,835
254,797
457,835
346,797
188,470 )
(
49,042 )
(
516,496
431,932
328,026
382,890
0.69
0.63
0.15
0.16
0.92
0.87
2025
2024
Other
YTD YTD
821
911
127,801
122,289
112,130
117,730
3,520
3,575
0.0078
0.007
1.1275
1.082
0.0080
0.007
1.1755
1.042
RASK (US cents) ...................................................
CASK (US cents) ...................................................
Yield (USD cents) ..................................................
To .......................................................................
On-Time-Performance (OTP) ................................
Passenger flights ...................................................
Stage length (KM) ..................................................
Sold Block Hours - Leasing ...................................
Net financial liabilities (USD '000) .......................................................................
From ...................................................................
Via ......................................................................
Within .................................................................
Net lease liabilites (USD '000) .........................................................................
Liquidity (USD '000) .............................................................................................
Net interest-bearing debt (USD '000) ...............................................................
Revenue Passenger kilometers (RPK m.) .............
Passengers total ('000) ..........................................
Freight ton kilometers (FTK'000) ...........................
Total CO2 emissions tons ('000) ...........................
CO2 emissions per OTK ........................................
Available seat-kilometers ASK (m.) .......................
Average rate ISK .................................................................................................
Average rate EUR ...............................................................................................
Period-end spot rate ISK .....................................................................................
Period-end spot rate EUR ...................................................................................
Passenger load factor ............................................
CASK less fuel (US cents) .....................................
TRASK (US cents) .................................................
CAPEX, net (USD '000) .......................................................................................
Average FTE .......................................................................................................
Intrinsic value of share capital .............................................................................
Total cash and marketable securities (USD '000) ...............................................
Effective fuel price (USD pr. Metric ton) ..............................................................
CAPEX, gross (USD '000) ...................................................................................
Current ratio ........................................................................................................
Equity ratio ..........................................................................................................
Alternative performance measures (APMs), contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 92
Traffic
Available seat-kilometers (ASK) ...........
Yield ......................................................
Passenger load factor ..........................
TRASK ..................................................
RASK ....................................................
CASK ....................................................
CASK less fuel ......................................
Revenue Passenger
Kilometer (RPK) ................................
Passengers total ...................................
On-Time-Performance (OTP) ...............
Passenger flights ..................................
Stage length (KM) .................................
Sold Block Hours - Leasing ..................
Freight ton kilometers (FTK) .................
Total CO2 emissions tons ....................
CO2 emissions per OTK .......................
Passenger mix:
To ......................................................
From ..................................................
VIA ....................................................
Within ................................................
Total revenues on a given flight divided by the ASK on that same flight.
The total number of seats available on scheduled flights multiplied by the number of
kilometers these seats were flown.
The average amount of total passenger revenue received per paying passenger
flown one kilometer. Total Yield is calculated as total passenger revenue/RPK. Total
passenger revenue used for this calculation includes airfare, excess baggage, cabin
upgrade and seat selection revenue.
Calculated by dividing RPK by ASK.
Total uplift revenue including excess baggage, class up, and chargeable seating on
a given flight divided by the ASK on that same flight
Total operating and depreciation cost per available seat kilometer is calculated by
dividing total operating and depreciation cost on a given flight by available seat
kilometers (ASK) on that flight.
Total operating and depreciation cost per available seat kilometer less fuel is
calculated by deducting cost of fuel, fuel hedges, carbon emissions trading expenses
and de-icing from total operating and depreciation cost and divide by total available
seat kilometers (ASK).
The number of revenue passengers carried on scheduled flights multiplied by the
number of kilometers flown.
Each passenger is counted by the number of flight coupons his journey requires. A
passenger flying KEF-CPH is counted as one passenger, a passenger flying NYC-
KEF-CPH is counted as two passengers.
A measure of flights arriving within 15 minutes of scheduled arrival time. OTP is
calculated by dividing the number of arrivals that arrive within 15 minutes of
scheduled arrival time with the total number of arrivals.
Flight flown by an airline for the purpose of carrying passengers, belly freight and
mail according to a published timetable for which it receives commercial
remuneration.
The distance flown from takeoff to landing in a single leg.
Sold Block Hours in the leasing operation. Block Hours is the time computed from
the moment the blocks are removed from the wheels of the aircraft until they are
replaced at the next point of landing.
The number of tons of freight carried, obtained by counting each ton of freight on a
particular flight (with one flight number).
Carbon emission from all flights, measured in tons.
CO2 emitted by moving one payload tonne one kilometer for all international flights.
Passenger visiting Iceland
Passengers originating in Iceland visiting destinations outside of Iceland
Passengers traveling across the Atlantic connecting in Iceland
Passengers traveling solely within Iceland
Alternative performance measures (APMs), contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 93
Capital sturcture
Total cash and
marketable securities .......................
Liquidity ................................................
Net interest-bearing debt ......................
Net lease liabilities ................................
Current ratio .........................................
Equity ratio ............................................
Intrinsic value of share capital ..............
Other
Effective fuel price ................................
CAPEX, gross .......................................
CAPEX, net ..........................................
Average FTE ........................................
Average rate .........................................
Period-end spot rate .............................
Cost of jet fuel and surcharges, including hedging results, but excluding de-icing and
emissions trading cost (pr. ton).
Cash and cash equivalents (including cash from assets held for sale) and marketable
securities.
Total cash and cash equivalents (including cash from assets held for sale),
marketable securities and undrawn revolving facilities.
Loans and borrowings, net of total cash and marketable securities.
Lease liabilities (including assets held for sale, net of lease receivables).
Indicates how many times over current assets can cover current liabilities and is
calculated by dividing current assets with current liabilities.
Indicates the ratio of how leveraged the Company is and is calculated by dividing
total equity with total assets.
Indicates the book value of each share and is calculated by dividing total equity with
share capital.
Capital expenditure of operating assets, intangible assets and deferred cost.
Capital expenditure of operating assets, intangible assets and deferred cost less
proceeds from sale of operating assets.
Average full time employee equivalent.
Average currency rate in the period.
Currency rate at closing date.
Alternative performance measures (APMs), contd.
Consolidated Financial Statements of Icelandair Group hf. 2025 94