Consolidated Financial Statements of Icelandair Group hf. 2024 1
3
7
11
12
13
14
15
Note Page Note Page
1. Reporting entity ........................................ 15 23. Inventories ................................................. 26
2. Basis of accounting .................................. 15 24. Marketable securities ................................ 26
3. Functional and presentation currency ...... 15 25. Trade and other receivables ..................... 26
4. Use of estimates and judgements ........... 15 26. Cash and cash equivalents ....................... 26
5. Changes in accounting policies ............... 16 27. Equity ........................................................ 26
6. Operating segments ................................. 16 28. Earnings per share .................................... 27
7. Operating income ..................................... 18 29. Loans and borrowings ............................... 27
8. Operating expenses ................................. 18 30. Lease liabilities .......................................... 29
9.
A
uditor's fee ............................................. 19 31. Provisions and other liabilities ................... 29
10. Depreciation and amortization ................. 19 32. Trade and other payables ......................... 30
11. Finance income and (finance cost) .......... 19 33. Deferred income ........................................ 30
12. Gain on sale of associate/subsidiary ....... 20 34. Financial risk management ....................... 30
13. Operating assets ...................................... 20 35. Financial instruments and fair value .......... 37
14. Mortgages and commitments ................... 20 36. Capital commitments ................................. 38
15. Insurance value of aircraft and 37. Related parties .......................................... 38
flight equipment ............................ 20 38. Litigations and claims ................................ 39
16. Insurance value of buildings and 39. Group entities ............................................ 40
other operating assets .................. 21 40. Ratios ........................................................ 40
17. Right of use assets .................................. 21 41 Investment and financing without
18. Intangible assets and goodwill ................. 21 cash flow effect ............................... 40
19. Impairment test ........................................ 22 42. Significant accounting policies .................. 40
20. Investment in associates ......................... 23 43. Standards issued but not yet effective ...... 49
21. Non-current receivables and deposits ..... 24
22. Income taxes ............................................ 24
Appendices:
50
55
79
82
88Alternative performance measures (APMs) ............................................................................................................
Consolidated Statement of Changes in Equity .......................................................................................................
Contents
Endorsement and Statement by the Board of Directors and the CEO ...................................................................
Independent Auditors' Report .................................................................................................................................
Consolidated Income Statement and other Comprehensive Income .....................................................................
Consolidated Statement of Financial Position ........................................................................................................
Quarterly Statements ..............................................................................................................................................
Corporate Governance Statement ..........................................................................................................................
Non-Financial Reporting .........................................................................................................................................
Consolidated Statement of Cash Flows ..................................................................................................................
Notes ......................................................................................................................................................................
Operational Risk .....................................................................................................................................................
Consolidated Financial Statements of Icelandair Group hf. 2024
2
Consolidated Financial Statements of Icelandair Group hf. 2024 3
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 2024 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.
The Consolidated Financial Statements of Icelandair Group hf. for the year 2024 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 2024
According to the Consolidated Income Statement, loss for the year 2024 amounted to USD 20 million. Equity at year end
amounted to USD 269 million, including share capital in the amount of USD 311 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.
The year 2024 was eventful for Icelandair. Revenue generation was impacted by weaker demand in the market to Iceland in
the high season in comparison to last year. Signs of recovery emerged in the fourth quarter of 2024, with net profit showing a
turnaround of USD 7 million compared to the previous year. As a result, the Company reported a loss of USD 20 million in
2024 compared to a profit of USD 11 million in 2023. Total revenues amounted to USD 1.6 billion, up by 3% year-on-year.
EBIT was negative of USD 14.2 million, down by USD 35 million, with an EBIT ratio of -1%.
Icelandair transported 4.7 million passengers in 2024, a 9% increase from the previous year. The via market saw the most
significant growth, with passenger numbers increasing by 29% and accounting for 45% of total passengers.
Icelandair‘s route network operations were robust in 2024, reflected by decreased unit cost, high customer satisfaction, and
strong on-time performance. The Company continuously ranked among the most punctual airlines in Europe over the summer
months.
Following a challenging year for the cargo operation in 2023, various measures were implemented to enhance the results in
2024. These efforts proved successful, resulting in a significant turnaround in 2024 as the cargo operation returned to operating
profit. The leasing business saw strong growth and success in 2024. Several aircraft were added to the fleet portfolio and
assigned to both existing and new customers, driving a one-third increase in revenue. New clients were secured in Asia and
Scandinavia through AM and ACMI agreements, and the world tours program had a record-breaking year. The outlook for the
leasing business for 2025 is strong.
Icelandair launched a comprehensive transformation journey named ONE in the first half of 2024 with the primary objective to
increase operational efficiency, mainly by lowering costs but also through revenue-generating initiatives. The transformation
has already started to deliver financial impact. By the end of 2024, the Company had implemented initiatives with over USD
20 million in annual impact when fully materialized, of which USD 15 million are cost initiatives. The initiative pipeline is strong,
with plans to implement initiatives worth USD 70 million by the end of 2025, with further impact in the following years.
Icelandair took delivery of its first Airbus A321LR in December 2024 and is expecting three additional A321LR to be delivered
before next summer. Icelandair signed an agreement with Airbus in 2023 for the purchase of 13 A321XLR aircraft with purchase
rights for an additional 12 aircraft. Deliveries will commence in 2029. The Airbus aircraft will increase the flexibility of the route
network, contribute to operational efficiencies, as well as further support the Company’s sustainability efforts.
Icelandair transitioned to its new headquarters, the Icelandair house, in late December. The Icelandair house is an extension
of Icelandair’s training center, built in 2014. From now on, all crew training, office operations, customer service, and the Network
Control Center will be housed under one roof. Additionally, crews gather at the Icelandair house before heading to Keflavik
airport.
Endorsement and Statement by the Board of Directors and the CEO, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 4
Operations in the year 2024, contd.:
Icelandair employed an average of 3,575 full-time employees in 2024.
Equity amounted to USD 269 million, with an equity ratio of 16.4% at the end of the year. The liquidity position remained strong,
with cash and marketable securities amounting to USD 255 million. Additionally, the Company had undrawn committed credit
lines of USD 92 million, bringing total liquidity to USD 347 million.
The prospects for Icelandair’s operations are favorable for 2025. All business segments are expected to improve year-on-year.
Positive development in unit cost is expected to continue, supported by the ONE transformation journey. The flight schedule
in the passenger network will be Icelandair’s largest ever, with 62 destinations, thereof four new. A fleet of 42 aircraft will be
operated within the passenger route network in the peak summer season, the same number of aircraft as in 2024, thereof 21
B737 MAX aircraft and four new A321LR aircraft. The Company expects to deliver better results in 2025, both in terms of EBIT
and after-tax profit.
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 2024 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 April
2024, a total of 385,300,000 stock options were granted based on the program. At year-end total outstanding stock options
numbered 747,400,000. See note 27.
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.
Endorsement and Statement by the Board of Directors and the CEO, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 5
Share capital and Articles of Association, contd.:
The number of shareholders at year-end 2024 was 13,968 a decrease of 436 during the year. At 31 December 2024 the 10
largest shareholders were:
Further information on matters related to share capital is disclosed in note 27. Additional information on shareholders is
provided on the Company's website www.icelandairgroup.com.
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 34. 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), which is expected to be implemented
in Iceland in 2025, 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 55.
Statement by the Board of Directors and the CEO
The Consolidated Financial Statements for the year ended 31 December 2024 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 2024 identified as
“549300UMI5MBLZSXGL15-2024-12-31-en.zip” 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 2024, its assets, liabilities and consolidated financial
position as at 31 December 2024 and its consolidated cash flows for the year 2024.
Shares in ISK
Name thousand Shares in %
7,073,868
1,945,179
1,478,149
1,257,604
998,984
718,970
715,849
663,704
636,953
556,391
16,045,653
25,074,595
41,120,247
Fossar fjárfestingarbanki hf. ........................................................................
1.35
1.55
Lífsverk lífeyrissjóður ...................................................................................
Brú Lífeyrissjóður starfsmanna sveitarfélaga ..............................................
3.59
Sólvöllur ehf. ................................................................................................
Arion banki hf. .............................................................................................
1.75
Birta lífeyrissjóður ........................................................................................
1.74
Gildi - lífeyrissjóður ......................................................................................
4.73
Lífeyrissjóður starfsmanna ríkisins A-deild ..................................................
3.06
Almenni lífeyrissjóðurinn .............................................................................
2.43
Blue Issuer Designated Activity Company ..................................................
17.20
Other shareholders ......................................................................................
1.61
100.00
39.02
60.98
Endorsement and Statement by the Board of Directors and the CEO, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 6
Statement by the Board of Directors and the CEO, contd.:
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 describes 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 2024 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, 30 January 2025
Board of Directors:
Guðmundur Hafsteinsson, Chairman of the Board
Nina Jonsson
John F. Thomas
Matthew Evans
Svafa Grönfeldt
CEO:
Bogi Nils Bogason
Consolidated Financial Statements of Icelandair Group hf. 2024 7
Independent Auditors' 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 2024, 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 2024, 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 our audit
of financial statements 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 appointed 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. 2024 8
Provision for scheduled aircraft engine maintenance
of leased engines and amortization of owned engines.
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.
We read new purchase and lease agreements for engines
in the year 2024 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.
The Audit
Key Audit Matters
The Audit
Key Audit Matters
Passenger revenue recognition
Reference is made to note 7 "Operating income” and 33
“Deferred income”.
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.
Reference is made to note 13 “Operating assets” and note
31 “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.
Independent Auditor's Report, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 9
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.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
Independent Auditor's Report, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 10
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 those charged with governance 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 2024 with the file name
“549300UMI5MBLZSXGL15-2024-12-31-en.zip” 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 is 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 2024 with the file name
“549300UMI5MBLZSXGL15-2024-12-31-en.zip” 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, 30 January 2025
KPMG ehf.
Sigríður Soffía Sigurðardóttir
Matthías Þór Óskarsson
Consolidated Financial Statements of Icelandair Group hf. 2024 11 Amounts are in USD thousands
Consolidated Income Statement and other Comprehensive Income
for the year 2024
Notes 2024 2023
Operating income
7 1,325,083 1,289,927
76,736 88,261
93,731 71,317
7 75,057 74,064
1,570,607 1,523,569
Operating expenses
406,030 391,564
360,200 371,321
292,140 264,547
372,381 339,673
8 1,430,751 1,367,105
Operating profit before depreciation and amortization (EBITDA) ..................................................................................................
139,856 156,464
10 154,067 )( 135,477 )(
Operating (loss) profit (EBIT) ...........................................................................................................................................
14,211 )( 20,987
31,501 27,308
42,770 )( 40,962 )(
11 11,269 )( 13,654 )(
12 0 1,381
20 673 925 )(
24,807 )( 7,789
22 4,638 3,380
20,169 )( 11,169
Other comprehensive income (loss)
Items that are or may be reclassified to profit or loss
2,210 )( 5,847
34 854 )( 2,104
34 8,797 5,194 )(
5,724 )( 721
9 3,478
20,160 )( 14,647
20,560 )( 10,726
391 443
20,169 )( 11,169
Total Comprehensive (loss) profit attributable to:
20,551 )( 14,204
391 443
20,160 )( 14,647
Earnings per share:
28 0.05)( 0.03
28 0.05)( 0.03
The notes on pages 15 to 49 are an integral part of these Consolidated Financial Statements.
Non-controlling interests ..................................................................................
(Loss) profit for the year ...........................................................................................................................
Currency translation differences ......................................................................
Total comprehensive (loss) profit for the year ...........................................................................
Other comprehensive income (loss) for the year ...........................................................................
Net profit 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 ...............................................
Other operating expenses ................................................................................
Diluted earnings per share in US cent .............................................................
Owners of the Company ...................................................................................
Non-controlling interests ..................................................................................
Total comprehensive (loss) profit for the year ...........................................................................
Basic earnings per share in US cent ................................................................
(Loss) profit for the year ...........................................................................................................................
Income tax ........................................................................................................
Gain on sale of subsidiary ................................................................................
(Loss) profit before tax (EBT) ......................................................................................................................................................................
Finance income ................................................................................................
Finance cost .....................................................................................................
Share of gain (loss) 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 .......................................................................................................
Consolidated Financial Statements of Icelandair Group hf. 2024 12 Amounts are in USD thousands
Consolidated Statement of Financial Position
as at 31 December 2024
Notes 2024 2023
Assets:
Operating assets .......................................................................................... 13,16 559,890 555,110
Right-of-use assets ...................................................................................... 17 406,035 348,520
Intangible assets and goodwill ..................................................................... 18,19 56,385 55,377
Investments in associates ............................................................................ 20 31,741 8,395
Receivables and deposits ............................................................................ 21 76,494
43,469
Deferred tax assets ...................................................................................... 22 63,794
59,728
Non-current assets 1,194,339 1,070,599
Inventories .................................................................................................... 23 24,488 23,841
Derivatives used for hedging ........................................................................ 34 4,416 791
Trade and other receivables ......................................................................... 25 159,830 161,923
Marketable securities ....................................................................................
24
104,562
71,008
Cash and cash equivalents ..........................................................................
26
150,235
199,514
Current assets 443,531 457,077
Total assets 1,637,870 1,527,676
Equity:
Share capital ................................................................................................ 310,973 310,973
Reserves ...................................................................................................... 37,206 20,112
Accumulated deficit ...................................................................................... 80,780 )( 44,015 )(
Equity attributable to equity holders of the Company 27 267,399 287,070
Non-controlling interests ............................................................................... 1,668
1,277
Total equity 269,067 288,347
Liabilities:
Loans and borrowings .................................................................................. 29 164,708 207,390
Lease liabilities ............................................................................................. 30 398,802 332,167
Provisions and other liabilities ...................................................................... 31 99,548 53,952
Non-current liabilities 663,058 593,509
Loans and borrowings .................................................................................. 29 41,046
44,940
Lease liabilities ............................................................................................. 30 66,302
54,083
Derivatives used for hedging ........................................................................ 34 5,615
6,598
Trade and other payables ............................................................................. 32 241,207
222,414
Deferred income .......................................................................................... 33 351,575
317,785
Current liabilities 705,745 645,820
Total liabilities
1,368,803
1,239,329
Total equity and liabilities 1,637,870 1,527,676
The notes on pages 15 to 49 are an integral part of these Consolidated Financial Statements.
Consolidated Financial Statements of Icelandair Group hf. 2024 13 Amounts are in USD thousands
Consolidated Statement of Changes in Equity
for the year 2024
Non-
Share Hedging Translation Other Accumulated controlling Total
capital reserve reserves deficit Total interest equity
2023
310,973 182 )( 9,555 )( 29,187 (57,914) 272,509 877 273,386
10,726 10,726 443 11,169
5,847 5,847 5,847
2,104 2,104 2,104
5,194 )( 5,194 )( 5,194 )(
721 721 721
0 43 )( 43 )(
357 357 357
2,816 )( 2,816 0 0
310,973 4,655 )( 1,604 )( 26,371 44,015 )( 287,070 1,277 288,347
2024
310,973 4,655 )( 1,604 )( 26,371 44,015 )( 287,070 1,277 288,347
20,560)( 20,560)( 391 20,169 )(
2,210)( 2,210)( 2,210 )(
854)( 854)( 854 )(
8,797 8,797 8,797
5,724)( 5,724)( 5,724 )(
880 880 880
17,085 17,085)( 0 0
310,973 1,582 )( 4,668 )( 43,456 80,780 )( 267,399 1,668 269,067
The notes on pages 15 to 49 are an integral part of these Consolidated Financial Statements.
Effects of profit or loss of subsidiaries
Equity 31 December 2023 .....................................
Equity 1 January 2024 ...........................................
Cash flow hedges, reclassified to profit or loss .....
Divestment of Non-controlling interest ...................
Stock options .........................................................
and associates ..................................................
Effective portion of changes in fair value
of cash flow hedges, net of tax ...........................
Equity 1 January 2023 ...........................................
Profit for the year ...................................................
Currency translation differences ............................
Net profit on hedge of investment, net of tax .........
Attributable to equity holders of the Company
Reserves
Equity 31 December 2024 .....................................
and associates ..................................................
Effects of profit or loss of subsidiaries
Stock options .........................................................
Currency translation differences ............................
Net 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 ....................................................
Consolidated Financial Statements of Icelandair Group hf. 2024 14 Amounts are in USD thousands
Consolidated Statement of Cash Flows
for the year 2024
Notes 2024 2023
Cash flows from (to) operating activities:
20,169 )( 11,169
Adjustments for:
Depreciation and amortization ..................................................................
10 154,067 135,477
54,698 27,560
11 11,269 13,654
1,295 )( 701 )(
12 0 1,381 )(
20 673 )( 925
22 4,638 )( 3,380 )(
193,259 183,323
Changes in:
23 2,486 131 )(
25 24,134 )( 12,326
32 18,667 26,451
33,817 14,319
Cash generated from (used in) operating activities 30,836 52,965
35,552 18,646
38,490 )( 39,813 )(
Net cash from (used in) operating activities 221,157 215,121
Cash flows from (to) investing activities:
Acquisition of operating assets .....................................................................
13 110,457 )( 133,849 )(
Proceeds from sale of operating assets ....................................................... 4,559 967
Acquisition of intangible assets .................................................................... 18 1,593 )( 634 )(
Deferred cost, change .................................................................................. 10,239 )( 10,264 )(
Proceeds from sale of a subsidiary ...............................................................
12 0 4,182
Proceeds from sale of associates .................................................................
212 3,075
Non-current receivables, change ..................................................................
13,725 )( 18,331 )(
Marketable securities, change ......................................................................
33,554 )( 28,849 )(
Net cash from (used in) investing activities 164,797 )( 183,703 )(
Cash flows from (to) financing activities:
Proceeds from loans and borrowings ........................................................... 29 0 63,461
Repayment of loans and borrowings ............................................................ 29 44,978 )( 70,293 )(
Repayment of lease liabilities ....................................................................... 30 60,412 )( 49,788 )(
Net cash from (used in) financing activities 105,390 )( 56,620 )(
Change in cash and cash equivalents ...............................................................................................
49,030 )( 25,202 )(
Effect of exchange rate fluctuations on cash held ......................................................................
249 )( 464
Cash and cash equivalents at beginning of the year ...................................................................................
199,514 224,252
Cash and cash equivalents at 31 December .............................................................................................
26 150,235 199,514
Marketable securities ....................................................................................
104,562 71,008
Cash, cash equivalents and marketable securities at 31 December ..........
254,797 270,522
The notes on pages 15 to 49 are an integral part of these Consolidated Financial Statements.
Inventories ................................................................................................
Share in (profit) loss of associates ...........................................................
Income tax ................................................................................................
(Loss) profit for the year ...............................................................................
Expensed deferred cost ............................................................................
Gain on sale of operating assets ..............................................................
Gain on sale of a subsidiary/associate .....................................................
Net finance cost ........................................................................................
Trade and other receivables .....................................................................
Trade and other payables .........................................................................
Deferred income .......................................................................................
Interest paid ..............................................................................................
Interest received .......................................................................................
Consolidated Financial Statements of Icelandair Group hf. 2024 15 Amounts are in USD thousands
Notes
1. Reporting entity
Icelandair Group hf. (the "Company") is a public limited liability company incorporated and domiciled in Iceland. The
address of the Company's registered office is at Reykjavíkurflugvöllur in Reykjavík, Iceland. The Consolidated Financial
Statements for the Company as at and for the year ended 31 December 2024 comprise the Company and its subsidiaries,
together referred to as the “Group” and individually as "Group entities" and the Group's interests in associates. The Group
primarily operates in the airline industry. The Company is listed on the Nasdaq Main Market Iceland,
www.nasdaqomxnordic.com. The Group´s website address is www.icelandairgroup.com.
2. Basis of accounting
a. Statement of compliance
The Group's Consolidated Financial Statements have been prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the EU and additional Icelandic disclosure requirements for consolidated financial
statements of listed companies. They were authorised for issue by the Company's Board of Directors on 30 January 2025.
b. Basis of measurement
The Consolidated Financial Statements are prepared on the historical cost basis except that derivative financial
instruments, part of deferred income and certain short-term investments are stated at their fair values. Details of the Group's
accounting policies are included in note 42.
c. Going concern
These Consolidated Financial Statements are prepared on a going concern basis.
3. Functional and presentation currency
The Company's functional currency is U.S. dollars (USD). These Consolidated Financial Statements are presented in U.S
dollars (USD). All financial information presented in USD has been rounded to the nearest thousand, unless otherwise
indicated.
4. Use of estimates and judgements
In preparing these Consolidated Financial Statements, management has made judgements, estimates and assumptions
that affect the application of the Group's accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized
prospectively.
Assumptions and estimation uncertainties
Information on assumptions and estimation uncertainties that have a risk of resulting in a material adjustment in the year
ending 31 December 2024 is included in the following notes:
Measurement of fair values
A number of the Group's accounting policies and disclosures require the measurement of fair value, for both financial and
non-financial assets and liabilities.
The Group has established a control framework with respect to the measurement of fair values. The Director of Treasury
and Risk Management has overall responsibility for overseeing all significant fair value measurements, including Level 3
fair values.
The Risk Committee regularly reviews significant unobservable inputs and valuation adjustments. If third party information,
such as broker quotes or pricing services, is used to measure fair values, then management assesses the evidence
obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the
level in the fair value hierarchy in which such valuations should be classified.
Note 35 - Financial instruments and fair value
Note 19 - Impairment test
Note 33 - Deferred income
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 16 Amounts are in USD thousands
4. Use of estimates and judgements, contd.:
Measurement of fair values, contd.:
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair
values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques
as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value
hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which
the change has occurred.
Further information about the assumptions made in measuring fair values is included in the following notes:
Note 35 – Financial Instruments and fair value
5. Changes in accounting policies
A number of new standards are effective for annual periods beginning after 1 January 2025 and earlier application is
permitted; however, the Group has not early adopted the new or amended standards in preparing these Consolidated
Financial Statements and they are not considered to have significant impact on the Consolidated Financial Statements.
6. Operating segments
Segment information is presented in the Condensed Consolidated Interim Financial Statements in respect of the Group's
business segments, which are the primary basis of segment reporting. The business segment reporting format reflects the
Group's management and internal reporting structure and is divided into three segments; Route network, Cargo operation
and Leasing operation.
The management of Icelandair Group assesses performance based on segment revenue and profit or loss and makes
resource allocation decisions for the segment based on various performance metrics. The objective in making resource
allocation decisions is to optimize consolidated financial results.
Inter-segment pricing is determined on an arm's length basis.
Route network
The Route network business unit is the main reporting segment, which provides passenger air travel to, from, via and
within Iceland by the entities Icelandair ehf. and Flugfélag Íslands ehf.
The segment also consist of the parent company Icelandair Group hf., the holding company, and other entities such as
Iceeignir ehf., a real estate entity, IceCap, a captive insurance entity, CAE Icelandair Flight Training ehf., which operates
flight simulators and FERIA ehf., a travel agency, are platform functions of the business that primarily support the Group
entities in this segment and are therefore classified within this segment.
Cargo operation
The Cargo operation, provided by the entity Icelandair Cargo ehf., offers air-freight services to, from, via and within Iceland
by utilizing the capacity within the aircraft of the Icelandair passenger network as well as with their own freighters.
Leasing operation
The Leasing operation, provided by the entity Loftleiðir-Icelandic ehf., offers aircraft leasing and consulting services to
international passenger airlines and tour operators.
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 17 Amounts are in USD thousands
6. Operating segments, contd.:
Reporting segments for the year 2024Route Cargo Leasingnetwork operation operation Eliminations TotalExternal revenue .........................................1,396,995 79,286 94,326 0 1,570,607 Inter-segment revenue ................................64,060 3,110 1,256 68,426 )( 0 Total segment revenue ................................1,461,055 82,396 95,582 68,426 )( 1,570,607 External operating cost ................................1,355,153 )( 42,671 )( 32,927 )( 0 1,430,751 )( Internal operating cost .................................3,758 )( 34,513 )( 30,155 )( 68,426 0 Total operating cost .....................................1,358,911 )( 77,184 )( 63,082 )( 68,426 1,430,751 )( Depreciation and amortization .....................133,757 )( 4,415 )( 15,895 )( 0 154,067 )( Segment EBIT .............................................31,613 )( 797 16,605 0 14,211 )( Net finance cost ..........................................9,299 )( 2,418 )( 448 0 11,269 )( Share of gain of associates .........................673 0 0 0 673 Income tax ...................................................7,845 328 3,535 )( 0 4,638 (Loss) profit .................................................32,394 )( 1,293 )( 13,518 0 20,169 )( Segment assets ..........................................1,533,797 88,851 101,754 86,532 )( 1,637,870 Segment liabilities .......................................1,317,501 71,768 66,066 86,532 )( 1,368,803
Reporting segments for the year 2023
Route Cargo Leasingnetwork operation operation Eliminations TotalExternal revenue .........................................1,360,033 94,450 69,086 0 1,523,569 Inter-segment revenue ................................59,084 2,342 435 61,861 )( 0 Total segment revenue ................................1,419,117 96,792 69,521 61,861 )( 1,523,569 External operating cost ................................1,273,018 )( 68,156 )( 25,931 )( 0 1,367,105 )( Internal operating cost .................................2,772 )( 37,387 )( 21,702 )( 61,861 0 Total operating cost .....................................1,275,790 )( 105,543 )( 47,633 )( 61,861 1,367,105 )( Depreciation and amortization .....................118,349 )( 8,417 )( 8,711 )( 0 135,477 )( Segment EBIT .............................................24,978 17,168 )( 13,177 0 20,987 Net finance cost ..........................................11,464 )( 2,532 )( 342 0 13,654 )( Gain on sale of subsidiary ...........................1,381 0 0 0 1,381 Share of loss of associates .........................925 )( 0 0 0 925 )( Income tax ...................................................2,104 3,998 2,722 )( 0 3,380 Profit (loss) ..................................................16,075 15,703 )( 10,797 0 11,169 Segment assets ..........................................1,445,559 95,144 60,946 73,973 )( 1,527,676 Segment liabilities .......................................1,197,810 76,753 38,739 73,973 )( 1,239,329
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 18 Amounts are in USD thousands
6. Operating segments, contd.:
The geographic analyses the Group's revenue as the majority of the Group's clients are outside of Iceland. The vast
majority of the Group's non-current assets are located in Iceland. In presenting the following information the Group's
revenues have been based on point of sale.
7. Operating income
8. Operating expenses
Geographic segments for the year 2024
North America Europe Iceland Other Total Passenger revenue .....................................768,548 315,370 212,013 29,152 1,325,083 Cargo revenue .............................................5,693 32,591 38,452 0 76,736 Leasing revenue ..........................................26,389 4,698 4,509 58,136 93,731 Other operating revenue .............................2,195 4,185 68,436 241 75,057 Total revenue ..............................................802,825 356,844 323,410 87,529 1,570,607 Total revenue % ..........................................51% 23% 21% 5% 100%
Geographic segments for year 2023
North America Europe Iceland Other Total Passenger revenue .....................................739,055 317,671 205,592 27,609 1,289,927 Cargo revenue .............................................5,875 37,478 44,907 0 88,261 Leasing revenue ..........................................25,965 1,825 4,789 38,739 71,317 Other operating revenue .............................2,559 3,401 68,088 16 74,064 Total revenue ..............................................773,454 360,375 323,376 66,364 1,523,569 Total revenue % ..........................................51% 24% 21% 4% 100%
Passenger revenue is specified as follows: 2024 2023Passenger revenue .........................................................................................................1,235,788 1,204,063 Ancillary revenue .............................................................................................................89,295 85,864 Total passenger revenue .................................................................................................1,325,083 1,289,927 Other operating revenue is specified as follows: Revenue from tourism .....................................................................................................40,162 39,424 Sale at airports ................................................................................................................4,909 7,333 Aircraft handling ..............................................................................................................8,810 7,051 Gain on sale of operating assets .....................................................................................1,298 701 Other operating revenue .................................................................................................19,878 19,555 Total other operating revenue .........................................................................................75,057 74,064
Salaries and salary-related expenses are specified as follows: 2024 2023Salaries ...........................................................................................................................321,352 303,680 Contributions to pension funds ........................................................................................51,287 48,881 Other salary-related expenses ........................................................................................33,391 39,003 Total salaries and salary-related expenses .....................................................................406,030 391,564 Average number of full time equivalents .........................................................................3,575 3,638 Full time equivalents at period end ..................................................................................3,166 3,542 Gender ratio for employees (male / female) ....................................................................53/47 54/46
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 19 Amounts are in USD thousands
8. Operating expenses, contd.:
9. Auditor's fee
10. Depreciation and amortization
11. Finance income and (finance cost)
Aircraft fuel is specified as follows:2024 2023Aircraft fuel ......................................................................................................................330,411 345,272 Emission charges ............................................................................................................21,336 23,272 Fuel hedges .....................................................................................................................8,453 2,777 Total Aircraft fuel cost ......................................................................................................360,200 371,321 Other aviation expenses is specified as follows:Aircraft and engine lease .................................................................................................4,492 12,380 Aircraft handling, landing and navigation ........................................................................165,402 153,770 Aircraft maintenance expenses .......................................................................................122,246 98,397 Total other aviation expenses ..........................................................................................292,140 264,547 Other operating expenses are specified as follows:Travel and other employee expenses .............................................................................71,662 68,114 Tourism expenses ...........................................................................................................30,725 29,532 IT expenses .....................................................................................................................35,961 33,839 Advertising .......................................................................................................................24,103 25,243 Booking fees and commission expenses ........................................................................68,848 66,157 Customer services ...........................................................................................................89,228 66,075 Operating cost of real estate and fixtures ........................................................................9,544 9,692 Allowance for bad debt ....................................................................................................1,416 1,262 Other operating expenses ...............................................................................................40,894 39,759 Total other operating expenses .......................................................................................372,381 339,673
Group auditors Other auditors Auditor's fee are specified as follows: 2024 2023 2024 2023Audit ...................................................................................460 435 45 48 Other services ....................................................................29 85 0 0 489 520 45 48
The depreciation and amortization charge in profit or loss is specified as follows: 2024 2023Depreciation of operating assets, see note 13 ................................................................96,511 84,665 Depreciation of right-of-use assets, see note 17 .............................................................56,970 50,353 Amortization of intangible assets, see note 18 ................................................................586 459 Depreciation and amortization recognized in profit or loss ..............................................154,067 135,477
Finance income and (finance cost) are specified as follows: 2024 2023Interest income on cash and cash equivalents and marketable securities .....................23,847 23,409 Interest income on lease receivables ..............................................................................2,353 225 Other interest income ......................................................................................................5,301 3,674 Finance income total .......................................................................................................31,501 27,308 Interest expenses on loans and borrowings ....................................................................15,484 )( 18,942 )( Interest on lease liabilities ...............................................................................................22,435 )( 18,715 )( Other interest expenses ..................................................................................................3,142 )( 3,047 )( Net currency exchange loss ............................................................................................1,709 )( 258 )( Finance cost total ............................................................................................................42,770 )( 40,962 )( Net finance cost ...............................................................................................................11,269 )( 13,654 )(
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 20 Amounts are in USD thousands
12. Gain on sale of subsidiary
In December 2021 Icelandair Group finalized the sale of Iceland Travel. Part of the sales price was subject to certain
performance metrics for 2022 that were fully realized. Revenue in the amount of USD 1.4 million was realized in Q2 2023
related to the sale of the subsidiary.
13. Operating assets
Acquisition of operating assets in 2024 amounted to USD 110.5 million (2023: USD 133.8 million) therof overhaul of own
engines and aircraft spare parts in the amount of USD 61.2 million (2023: USD 89.8 million). In December 2024 the
Company moved its main office to a new building, the Icelandair House. The new office is built for purpose, is more
economical than the previous headquarter and strategically located closer to the Keflavik International Airport. The total
cost of the building and relocation from the previous building was USD 39 million.
14. Mortgages and commitments
The Group's operating assets, aircraft and spare parts are mortgaged to secure debt. The remaining balance of the debt
amounted to USD 197.2 million at year-end 2024 (2023: USD 239.3 million). The Group owns 30 aircraft including 13
Boeing 757, four Boeing 767, six Boeing 737's and seven DHC Dash 8's. At year-end, 12 aircraft were unencumbered.
15. Insurance value of aircraft and flight equipment
The insurance value and carrying amount of the Group's aircraft and related equipment at year-end is specified as follows:
Operating assets are specified as follows: Aircraft Other and flight property and Cost equipment Buildings equipment Total Balance at 1 January 2023 ................................................882,654 91,660 93,809 1,068,123 Additions ............................................................................112,343 12,443 9,063 133,849 Sales and disposals ...........................................................45,905 )( 270 )( 17,672 )( 63,847 )( Effects of movements in exchange rates ...........................354 4,267 156 4,777 Balance at 31 December 2023 ..........................................949,446 108,100 85,356 1,142,902 Additions ............................................................................74,478 24,082 11,897 110,457 Sales and disposals ...........................................................74,649 )( 0 2,938 )( 77,587 )( Effects of movements in exchange rates ...........................89 )( 1,971 )( 92 )( 2,152 )( Balance at 31 December 2024 ..........................................949,186 130,211 94,223 1,173,620 Aircraft Other and flight property and Depreciation and impairment equipment Buildings equipment Total Balance at 1 January 2023 ................................................484,461 25,752 52,322 562,535 Depreciation .......................................................................73,693 3,308 7,664 84,665 Sales and disposals ...........................................................43,946 )( 270 )( 16,648 )( 60,864 )( Effects of movements in exchange rates ...........................153 1,187 116 1,456 Balance at 31 December 2023 ..........................................514,361 29,977 43,454 587,792 Depreciation .......................................................................85,170 3,189 8,152 96,511 Sales and disposals ...........................................................67,046 )( 0 2,919 )( 69,965 )( Effects of movements in exchange rates ...........................50 )( 527 )( 31 )( 608 )( Balance at 31 December 2024 ..........................................532,435 32,639 48,656 613,730 Carrying amountsAt 1 January 2023 ..............................................................398,193 65,908 41,487 505,588 At 31 December 2023 ........................................................435,085 78,123 41,902 555,110 At 31 December 2024 ........................................................416,751 97,572 45,567 559,890 Depreciation ratios .............................................................4-20% 2-6% 5-33%
Insurance value Carrying amounts 2024 2023 2024 2023Boeing - 23 / 26 aircraft ......................................................589,130 654,797 352,803 355,843 Other - 7 / 7 aircraft ............................................................64,000 65,000 25,601 31,456 Flight equipment ................................................................96,980 105,732 38,347 47,786 Total aircraft and flight equipment ......................................750,110 825,529 416,751 435,085
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 21 Amounts are in USD thousands
16. Insurance value of buildings and other operating assets
The principal buildings owned by the Group are the following:
Official valuation of the Group's leased land for buildings at 31 December 2024 amounted to USD 19 million (2023: USD
16.7 million) and is not included in the Consolidated Statement of Financial Position.
Insurance value of the Group's other operating assets and equipment amounted to USD 70.0 million at year-end 2024
(2023: USD 52.5 million). The carrying amount at the same time was USD 45.174 million (2023: USD 41.5 million).
17. Right of use assets
Right of use assets are specified as follows:
18. Intangible assets and goodwill
Intangible assets and goodwill are specified as follows:
Maintenance Staff Office Other Under 2024 hangars apartments buildings buildings construction TotalOfficial assessment value ........ 43,099 8,324 27,772 14,771 0 93,966 Insurance value .......................89,099 18,488 90,553 29,060 0 227,200 Carrying amounts ....................20,074 3,550 66,351 7,597 0 97,572 Square meters ......................... 31,814 6,813 21,530 12,124 0 72,281 Maintenance Staff Office Other Under 2023 hangars apartments buildings buildings construction TotalOfficial assessment value ........ 41,201 8,190 21,857 17,316 0 88,564 Insurance value ....................... 86,705 17,991 63,616 29,019 12,020 209,351 Carrying amounts .................... 21,576 3,831 24,970 5,987 21,759 78,123 Square meters ......................... 31,814 6,813 19,199 12,124 0 69,950
Land & Aircraft Real Estate Other TotalBalance at 1 January 2023 ................................................309,457 8,758 756 318,971 Adjustments .......................................................................238 )( 0 10 )( 248 )( Adjustments for indexed leases .........................................7,061 625 60 7,746 New or renewed leases .....................................................70,076 1,814 471 72,361 Depreciation .......................................................................47,313 )( 2,552 )( 488 )( 50,353 )( Currency translation adjustment ........................................0 43 0 43 Balance at 31 December 2023 ..........................................339,043 8,688 789 348,520 Adjustments .......................................................................2,999 902 )( 198 )( 1,899 Adjustments for indexed leases .........................................922 )( 280 35 607 )( New or renewed leases .....................................................111,917 640 681 113,238 Depreciation .......................................................................52,545 )( 3,885 )( 540 )( 56,970 )( Currency translation adjustment ........................................0 47 )( 2 45 )( Balance at 31 December 2024 ..........................................400,492 4,774 769 406,035
Trademarks Other Cost Goodwill and slots intangibles Total Balance at 1 January 2023 ................................................55,728 34,565 6,838 97,131 Additions ............................................................................0 0 634 634 Disposals ...........................................................................0 0 5,095 )( 5,095 )( Balance at 31 December 2023 ..........................................55,728 34,565 2,377 92,670 Additions ............................................................................0 0 1,593 1,593 Disposals ...........................................................................0 0 471 )( 471 )( Balance at 31 December 2024 ..........................................55,728 34,565 3,499 93,792
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 22 Amounts are in USD thousands
18. Intangible assets and goodwill, contd.:
19. Impairment test
Goodwill and other intangible assets that have indefinite life are tested for impairment annually and additionally at each
reporting date if there is an indication of impairment.
These assets were recognized at fair value on their acquisition dates. Goodwill and other intangible assets with indefinite
life are specified as follows:
For the purpose of impairment testing, goodwill is allocated to the units which represent the level within the Group at which
the goodwill is monitored for internal management purposes. The aggregate carrying amounts of goodwill allocated to each
cash generating unit (CGU) are as follows:
The recoverable amounts of cash-generating units was based on their value in use and was determined by discounting
the future cash flows generated from the continuing use of the CGU. Icelandair prepared a 5-year high level financial plan
based on long-term targets that Icelandair has set regarding profitability and growth. Cash flows were projected based on
actual operating results and a 5-year business plan. Cash flows were extrapolated for determining the residual value using
a constant nominal growth rate which was consistent with the long-term average growth rate for the industry. Management
believes that this forecast period was justified due to the long-term nature of the business. There are still some uncertainties
that the Group's operations face such as economic uncertainty in Europe, inflationary pressures in our main markets and
salary developement in Iceland and increasing emissions cost. A weighted USA and EU CPI forecast from IMF was used
as a base for inflationary increases. The renewal of aircraft in the fleet will have a positive effect on some cost items.
Trademarks Other Amortization and impairment losses Goodwill and slots intangibles Total Balance at 1 January 2023 ................................................33,308 2,605 6,016 41,929 Amortization .......................................................................0 0 459 459 Disposals ...........................................................................0 0 5,095 )( 5,095 )( Balance at 31 December 2023 ..........................................33,308 2,605 1,380 37,293 Amortization .......................................................................0 0 586 586 Disposals ...........................................................................0 0 471 )( 471 )( Balance at 31 December 2024 ..........................................33,308 2,605 1,495 37,408 Carrying amountsAt 1 January 2023 ..............................................................22,420 31,960 822 55,202 At 31 December 2023 ........................................................22,420 31,960 997 55,377 At 31 December 2024 ........................................................22,420 31,960 2,004 56,385
2024 2023Goodwill ...........................................................................................................................22,420 22,420 Trademarks and airport slots ...........................................................................................31,960 31,960 Total ................................................................................................................................54,380 54,380
GoodwillTrademarks and slots2024 2023 2024 2023Passenger and cargo operations .......................................0 0 31,960 31,960 Other Group entities ...........................................................22,420 22,420 0 0 Total .................................................................................22,420 22,420 31,960 31,960
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 23 Amounts are in USD thousands
19. Impairment test, contd.:
The values assigned to the key assumptions represent management's assessment of future trends in the airline and
transportation industries and are based on both external sources and internal historical data. Value in use was based on
the following key assumptions:
The recoverable amounts of the cash-generating units at year-end were estimated to be higher than carrying amounts and
no impairment was required. Reasonable change in main assumptions would not lead to impairment.
20. Investment in associates
The Group has interests in a number of associates. The carrying amount and share of profit of the associates is as follows:
EBK ehf. operates jet fuel tank storage facilities, serving fuel to suppliers and airlines at Keflavík airport.
Landsbréf – Icelandic Tourism Fund I slhf. (ÍTF1 slhf.) is a fund managed by Landsbréf. The Fund's purpose was to invest
in Icelandic companies focusing on entertainment and leisure activities for foreign tourists, with focus on projects that have
full-year operational potential. The original lifespan of the Fund was until year-end 2023 which has been extended by two
years, until year-end 2025. The aim of the Fund is to return proceeds from its investments to shareholders as soon as they
are realized.
Lindarvatn ehf. is the owner of a property at Thorvaldsensstræti in downtown Reykjavík and other properties located near
Austurvöllur which have been rebuilt as a hotel which was opened in December 2022.
Passenger andOther Group2024cargo operationsentities *Long-term growth rate .....................................................................................................3.0% 2.5%Revenue growth: Weighted average 2024/2023 ......................................................................................1.2% 36.7% 2024- 2029 ...................................................................................................................8.4% 6.8%Budgeted EBIT growth 2025-2029 ..................................................................................39.5% 2.0%WACC .............................................................................................................................10.6% 13.5%Debt leverage ..................................................................................................................68.1% 68.6%Pre-tax interest rate for debt ............................................................................................7.3% 7.6%2023Long-term growth rate .....................................................................................................2.5% 2.5%Revenue growth: Weighted average 2023/2022 ......................................................................................14.7% 21.5% 2023-2028 ....................................................................................................................8.3% 9.9%Budgeted EBIT growth 2024-2028 ..................................................................................54.6% -2.2%WACC .............................................................................................................................10.0% 13.6%Debt leverage ..................................................................................................................67.1% 68.1%Pre-tax interest rate for debt ............................................................................................6.7% 6.9%* Weighted average of underlying CGU.
20242023Share of Share ofOwnership Carrying profit/loss in Carrying profit/loss inamount associates amount associatesEBK ehf. ......................................................25% 1,338 386 1,190 157 ÍTF 1 slhf. ....................................................29% 7,244 336 7,029 534 Lindarvatn ehf. .............................................50% 22,989 50 )( 0 1,618 )( Other investments ..............................................................170 1 176 2 Total investments in associates .........................................31,741 673 8,395 925 )(
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 24 Amounts are in USD thousands
21. Non-current receivables and deposits
Non-current receivables consist of notes, deposits for aircraft and engine lease agreements and various other travel related
security fees.
Non-current receivables and deposits denominated in currencies other than the functional currency comprise USD 3.1
million (2023: USD 3.4 million).
22. Income taxes
Non-current receivables and deposits are specified as follows:2024 2023Loans, effective interest rate ...........................................................................................1,673 1,977 Lease receivable, interest rate 6.9% / 5% .......................................................................33,083 15,687 Security deposits .............................................................................................................18,149 20,786 Prepayments on aircraft purchases .................................................................................32,955 11,138 85,860 49,588 Current maturities ............................................................................................................9,366 )( 6,119 )( Non-current receivables and deposits total .....................................................................76,494 43,469 Contractual repayments mature as follows:Maturities in 2024 ............................................................................................................ - 6,119 Maturities in 2025 ............................................................................................................9,366 3,485 Maturities in 2026 ............................................................................................................9,559 3,495 Maturities in 2027 ............................................................................................................7,141 3,544 Maturities in 2028 ............................................................................................................5,560 3,568 Maturities in 2029 ............................................................................................................5,363 2,527 Subsequent ....................................................................................................................48,871 26,850 Total non-current receivables and deposits, including current maturities ......................85,860 49,588
(i) Amounts recognized in profit or lossDeferred tax expense2024 2023Origination and reversal of temporary differences ..........................................................4,356 )( 1,112 Exchange rate difference ................................................................................................282 )( 4,492 )( Total tax expense recognized in profit or loss .................................................................4,638 )( 3,380 )( (ii) Amounts recognized in other comprehensive incomeEffective portion of changes in fair value of cash flow hedge ..........................................774 1,124 )( Exchange rate difference ................................................................................................213 )( 526 Total tax recognized in other comprehensive income .....................................................561 598 )( (iii) Reconciliation of effective tax rate20242023(Loss) profit before tax .......................................................24,807 )( 7,789 Income tax according to current tax rate ............................21.0% 5,209 )( 20.0% 1,558 Non-deductible expenses ..................................................0.4% 111 1.8%)( (139 )Gain on sale of a subsidiary/associate ..............................0.0% 0 3.5%)( (276 )Share of loss of associates ................................................0.6%)( 141 )( 2.4% 185 Exchange rate difference - tax loss carry-forwards ............5.0% 1,228 41.6%)( 3,237 )( Exchange rate difference - other ........................................6.1%)( 1,510 )( 16.1%)( 1,255 )( Other items ........................................................................3.6% 883 2.8%)( (216 )Effective tax rate ................................................................18.7% 4,638 )( ( 43.4%) 3,380 )( (iv) Recognized deferred tax assetDeferred tax assets are specified as follows:2024 2023Deferred tax assets 1 January .........................................................................................59,728 55,593 Deferred tax recognized in profit or loss ..........................................................................4,638 3,380 Income tax recognized in other comprehensive income .................................................561 )( 598 Exchange rate difference ................................................................................................11 )( 157 Deferred tax assets 31 December ...................................................................................63,794 59,728
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 25 Amounts are in USD thousands
22. Income taxes, contd.:
Based on a five-year forecast and taking into a account the reversal of existing temporary differences, the Group expects
to utilize its carry forward tax loss.
(v) Deferred tax liabilities are attributable to the following:AssetsLiabilitiesNet2024 2023 2024 2023 2024 2023Operating assets .....................0 0 24,843 )( 30,753 )( 24,843 )( 30,753 )( Intangible assets .....................0 0 128 )( 70 )( 128 )( 70 )( Derivatives ...............................396 1,170 0 0 396 1,170 Trade receivables ....................1,522 1,425 0 0 1,522 1,425 Right-of-use assets .................0 0 108,543 )( 91,472 )( 108,543 )( 91,472 )( Lease claim .............................0 0 15,801 )( 12,979 )( 15,801 )( 12,979 )( Lease liabilities ........................129,148 108,360 0 0 129,148 108,360 Tax loss carry-forwards ...........81,580 84,152 0 0 81,580 84,152 Other items ..............................463 0 0 105 )( 463 105 )( Total ........................................213,109 195,107 149,315 )( 135,379 )( 63,794 59,728 (vi) Movements in deferred tax balance during the year Recognizedin other com-Recognized Exchange prehensivein profit rate income2024 1 January or loss difference and equity 31 DecemberOperating assets .........................................30,753 )( 5,882 28 24,843 )( Intangible assets .........................................70 )( 58 )( 128 )( Derivatives ...................................................1,170 774 )( 396 Trade receivables ........................................1,425 97 1,522 Right-of-use assets .....................................91,472 )( 17,071 )( 108,543 )( Lease claim .................................................12,979 )( 2,822 )( 15,801 )( Lease liabilities ............................................108,360 20,788 129,148 Tax loss carry-forwards ...............................84,152 2,511 )( 61 )( 81,580 Other items ..................................................105 )( 333 22 213 463 Total ............................................................59,728 4,638 11 )( 561 )( 63,794 Recognizedin other com-Recognized Exchange prehensivein profit rate income2023 1 January or loss difference and equity 31 DecemberOperating assets .........................................27,114 )( 3,580 )( 59 )( 30,753 )( Intangible assets .........................................58 )( 12 )( 70 )( Derivatives ...................................................46 1,124 1,170 Trade receivables ........................................336 1,088 1 1,425 Right-of-use assets .....................................85,816 )( 5,655 )( 1 )( 91,472 )( Lease claim .................................................6,971 )( 6,008 )( 12,979 )( Lease liabilities ............................................94,155 14,204 1 108,360 Tax loss carry-forwards ...............................78,556 5,500 96 84,152 Other items ..................................................2,459 2,157 )( 119 526 )( 105 )( 55,593 3,380 157 598 59,728 Tax loss carry-forwards are specified as follows:2024 2023Tax loss from 2018 expire 2028 ......................................................................................64,408 92,449 Tax loss from 2019 expire 2029 ......................................................................................43,595 44,349 Tax loss from 2020 expire 2030 ......................................................................................175,665 178,706 Tax loss from 2021 expire 2031 ......................................................................................87,354 88,866 Tax loss from 2022 expire 2032 ......................................................................................0 0 Tax loss from 2023 expire 2033 ......................................................................................0 16,390 Tax loss from 2024 expire 2034 ......................................................................................36,875 0 Tax loss carry-forwards total ...........................................................................................407,897 420,760
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 26 Amounts are in USD thousands
23. Inventories
24. Marketable securities
At year-end marketable securities amounted to USD 105 million (2023: USD 71 million). The increase is due to higher
allocation of funds to the asset class given favorable yields on locally issued commercial papers. Marketable securities
consist of term deposits, government, bank and corporate bonds and bills, and unit shares in local mutual funds that are
valued at their year-end market price. No restrictions apply to the securities’ redemption.
25. Trade and other receivables
At year-end trade receivables are presented net of an allowance for doubtful accounts of USD 7.4 million (2023: USD 6.9
million).
Prepayment and prepaid expenses which relate to subsequent periods amounted to USD 25.2 million (2023: USD 28.3
million) at year-end. The prepayments consist mainly of prepaid contractual obligations, insurance premiums, software
licenses and leases.
Restricted cash is held in bank accounts pledged against credit card acquirers, derivatives, airport operators and tourism
guarantees.
The Group's exposure to credit and currency risks and impairment losses related to trade and other receivables is disclosed
in note 34.
26. Cash and cash equivalents
27. Equity
Share capital
The Company's share capital amounts to ISK 41,120,247 thousand according to its Articles of Association. Each share
carries one vote at shareholders' meetings. The shares are freely transferable unless otherwise stipulated by law. All
shareholders hold equal rights to dividend payments as declared from time to time.
The Company held no treasury shares at year-end 2024.
Share premium
Share premium represents excess of payment above the nominal value (ISK 1 per share) that shareholders have paid for
shares sold by the Company. According to the Icelandic Companies Act, 25% of the nominal value of share capital must
be held in reserve. The balance of the share premium account can be used to offset losses not covered by other reserves
or to offset stock splits.
Inventories are specified as follows:2024 2023Spare parts ......................................................................................................................22,816 20,292 Other inventories .............................................................................................................1,672 3,549 Inventories total ...............................................................................................................24,488 23,841
Trade and other receivables are specified as follows:2024 2023Trade receivables ............................................................................................................72,597 56,203 Prepayments ...................................................................................................................25,227 28,323 Restricted cash ................................................................................................................34,250 37,013 Lease receivables ...........................................................................................................8,664 3,000 Receivables due from related parties ..............................................................................0 22,718 Current maturities of non-current receivables and deposits ............................................9,366 6,119 Other receivables ............................................................................................................9,726 8,547 Trade and other receivables total ....................................................................................159,830 161,923
Cash and cash equivalents are specified as follows:2024 2023Securities and fixed term bank deposits ..........................................................................8,763 63,455 Bank deposits ..................................................................................................................141,472 136,059 Cash and cash equivalents total .....................................................................................150,235 199,514
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 27 Amounts are in USD thousands
27. Equity, contd.:
Reserves
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet occurred.
The translation reserve comprises all currency differences arising from the translation of the financial statements of
subsidiaries having functional currencies other than the Group as well as from the translation of liabilities that hedge net
investment. According to the Icelandic Financial Statements Act, companies must retain, in a separate equity account,
recognized share in profit of subsidiaries and associates in excess of dividend received or declared.
Stock options
The Company has in place a Stock Options program for its Executive Committee and Director-level employees. All granted
options accrue 3% annual interest and will be adjusted for any future dividends. To date a total of 778.6 million shares have
been issued in relation to the Program, 393.3 million shares with an issue price of ISK 1.97 per share in April 2023 and
385.3 million with an issue price of ISK 1.39 per share in February 2024. The total number of employees participating in
the Program is 51. The estimated cost of the Stock Option Program for the Company is approximately USD 2.7 million until
2027, based on the Black-Scholes model, therof USD 1.3 million has been expensed.
Dividend
No dividend was paid to shareholders in 2024 and 2023.
The Board of Directors proposes no dividend payment to shareholders in 2025 for the year 2024 as it is not permitted by
law due to accumulated deficit at year-end.
For the longer term the dividend policy is as follows: “The Company's goal is to declare 20-40% of annual net profit as
dividend. The final decision on dividend payments will be based on the financial position of the Company, operating capital
requirements and market conditions.”
28. Earnings per share
Earnings per share is calculated by dividing net profit or loss attributable to equity holders of the Parent Company by the
weighted average number of outstanding shares during the year. Diluted earnings per share are calculated by adjusting
the weighted average number of shares outstanding to assume conversion of all dilutive potential shares.
29. Loans and borrowings
This note provides information on contractual terms of the Group's interest-bearing loans and borrowings, which are
measured at amortized cost, and changes during the year. For more information on the Group's exposure to interest rate,
foreign currency and liquidity risk, see note 34.
(
Basic earnings per share: 2024 2023(Loss) profit for the year attributable to equity holders of the parent company ...............20,560 )( 10,726 Weighted average number of shares for the year ...........................................................41,120,247 41,120,247 Weighted average number of shares for the year including stock options ......................41,809,038 41,381,758 Basic earnings per share in US cent per share ...............................................................0.05 )( 0.03 Diluted earnings per share in US cent per share ............................................................0.05 ) 0.03
Non-current interest bearing debt Total Total interest-bearing debt 1 January 2023 .....................................................................255,717 255,717 Proceeds from loans and borrowings ..............................................................................67,080 67,080 Transaction cost of long-term loans and borrowings .......................................................3,619 )( 3,619 )( Repayment of borrowings ................................................................................................70,293 )( 70,293 )( Cash flows related to financing activities .........................................................................6,832 )( 6,832 )( Accrued interest added to the loans ...............................................................................404 404 Financing activities without cash flows ............................................................................404 404 Currency exchange difference .........................................................................................2,169 2,169 Expensed borrowing cost recognized in finance cost ......................................................872 872 Other liability related changes .........................................................................................3,041 3,041 Total interest-bearing debt 31 December 2023 ...............................................................252,330 252,330
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 28 Amounts are in USD thousands
29. Loan and borrowings, contd.:
Included in unsecured loans are deferred payroll tax payments that formed a part of general government measures in 2020
and 2021 to mitigate the negative effects of COVID-19. The loans carry zero interest and are measured at net present
value. The deferred payments granted in 2020 are payable in monthly installments over a 48-month period from July 2022
– June 2026.
The Company has three committed credit lines in place with local banks in the total amount of USD 92 million. The lines
were undrawn at year-end 2024.
The Company was granted a concession to minimum a equity ratio covenant in a long-term funding agreement with a local
bank in 2024. The ratio should be no less than 10% at the end of each reporting period. The carrying amount of the loan
in question was USD 24.6 million at 31 December 2024. The Company expects to be granted the same concession if
needed in 2025.
Non-current interest bearing debt Total Total interest-bearing debt 1 January 2024 .....................................................................252,330 252,330 Repayment of borrowings ................................................................................................44,978 )( 44,978 )( Cash flows related to financing activities .........................................................................44,978 )( 44,978 )( Accrued interest added to the loans ...............................................................................400 400 Financing activities without cash flows ............................................................................400 400 Currency exchange difference .........................................................................................2,672 )( 2,672 )( Expensed borrowing cost recognized in effective interests .............................................674 674 Other liability related changes .........................................................................................1,998 )( 1,998 )( Total interest-bearing debt 31 December 2024 ...............................................................205,754 205,754 Loans and borrowings are specified as follows:Non-current loans and borrowings: 2024 2023Secured bank loans .........................................................................................................197,210 239,335 Unsecured loans .............................................................................................................8,544 12,995 Total loans and borrowings .............................................................................................205,754 252,330 Current maturities ............................................................................................................41,046 )( 44,940)( Total non-current loans and borrowings ..........................................................................164,708 207,390 Current loans and borrowings:Current maturities of non-current liabilities ......................................................................41,046 44,940 Total current loans and borrowings .................................................................................41,046 44,940 Total loans and borrowings .............................................................................................205,754 252,330 Terms and debt repayment schedule:Nominalinterest Year of Total remaining balanceCurrency rates year maturity 2024 2023Secured bank loans ....................................USD 6.4% 2026-2034 166,123 199,589 Secured bank loans ....................................EUR 3.8% 2028 31,087 39,746 Unsecured loans .........................................ISK 4.3% 2026-2030 8,544 12,995 Total interest bearing liabilities ........................................................................................205,754 252,330
Repayments of loans and borrowings are specified as follows: 2024 2023Repayments in 2024 ....................................................................................................... - 44,940 Repayments in 2025 .......................................................................................................41,046 41,542 Repayments in 2026 .......................................................................................................37,911 38,372 Repayments in 2027 .......................................................................................................20,485 21,124 Repayments in 2028 .......................................................................................................54,971 54,999 Repayments in 2029 .......................................................................................................9,699 11,477 Subsequent repayments .................................................................................................41,642 39,876 Total loans and borrowings .............................................................................................205,754 252,330
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 29 Amounts are in USD thousands
30. Lease liabilities
This note provides information of the Group's lease liabilities, which are measured at amortized cost, and changes during
the year. For more information on the Group's exposure to interest rate, foreign currency and liquidity risk, see note 34.
Further lease commitments are in place for six A321LR aircraft scheduled for delivery to the Route network as
demonstrated in the table below. The total lease liability for these six aircraft is estimated to be around USD 282 million.
31. Provisions and other liabilities
Provisions and other liabilities correspond to accrued engine overhaul cost of leased aircraft and security deposits from
lease contracts to be realized after lease contracts. Provisions and other liabilities are specified as follows:
7,801
Lease liabilities is specified as follows: 2024 2023Balance at 1 January .......................................................................................................386,250 342,155 Adjustments .....................................................................................................................1,802 )( ( 262 )Adjustments for indexed leases ......................................................................................601 )( New or renewed leases ...................................................................................................141,501 85,961 Payment of lease liabilities ..............................................................................................82,941 )( ( 68,574 )Interest of lease liabilities ................................................................................................22,529 18,786 Currency translation adjustment ......................................................................................168 383 Balance at 31 December .................................................................................................465,104 386,250 Current maturities ............................................................................................................66,302 )( 54,083 )( Total non-current lease liabilities .....................................................................................398,802 332,167 Average Land & Rate Aircraft Real Estate Other TotalLease liabilities in USD ...............................5.51% 459,456 7 37 459,500 Lease liabilities in ISK, indexed ...................5.74% 0 54,126 723 4,849 Lease liabilities in GBP ...............................2.40% 0 187 9 196 Lease liabilities in other currency ................6.18% 0 536 23 559 Total lease liabilities ....................................459,456 4,856 792 465,104 Maturity analysis 2024 2023Repayments in 2024 ....................................................................................................... -54,083Repayments in 2025 .......................................................................................................66,302 52,432Repayments in 2026 .......................................................................................................66,620 52,287Repayments in 2027 .......................................................................................................63,642 48,474Repayments in 2028 .......................................................................................................59,218 43,100Repayments in 2029 .......................................................................................................60,250 5,318Subsequent repayments .................................................................................................149,072 130,556Total lease liabilities ........................................................................................................465,104 386,250
Q1 2025 Q2 2025 Q4 2025 Q1 2026 TotalA321LR .......................................................2 1 2 1 6
2024 2023Provisions and other liabilities .........................................................................................116,561 64,360 Current portion, classified in trade and other payables ...................................................17,013 )( 10,408 )( Total provisions and other liabilities ................................................................................99,548 53,952 Provisions and other liabilities are scheduled to be repaid as follows: Repayments in 2024 ....................................................................................................... - 10,408 Repayments in 2025 .......................................................................................................17,013 9,897 Repayments in 2026 .......................................................................................................3,107 2,788 Repayments in 2027 .......................................................................................................4,291 2,604 Repayments in 2028 .......................................................................................................22,151 12,164 Repayments in 2029 .......................................................................................................3,431 6,756 Subsequent ....................................................................................................................66,568 19,743 Total provisions and other liabilities, including current maturities ..................................116,561 64,360
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 30 Amounts are in USD thousands
32. Trade and other payables
Trade and other payables are specified as follows:
33. Deferred income
Sold unused tickets, fair value of unredeemed frequent flyer points and other prepayments are presented as deferred
income in the Consolidated Statement of Financial Position.
Deferred income is specified as follows:
The amount allocated to sold unused tickets and vouchers is the book value of fares and fuel surcharges that the Group
has collected and is liable for to passengers. Thereof sold tickets with future travel dates amounted to USD 274.2 million
(2023: USD 247.1 million) and vouchers amounted to USD 21.8 million (2023: USD 25.4 million). When issued the
vouchers are generally valid for 3 years. The validity of covid-related vouchers has been extended by an additional two
years from the date of original issuance.
The amount allocated to frequent flyer points is estimated by reference to the fair value of the discounted services for which
they could be redeemed, since the fair value of the points themselves is not directly observable. The fair value of the
discounted services for which the points, granted through a customer loyalty program, can be redeemed takes into account
the expected redemption rate and the timing of such expected redemptions. That amount is recognized as deferred income.
Other prepayments consist mainly of prepayments for packages and charter flights.
34. Financial risk management
Overview
The Group has exposure to the following financial risks:
- Credit risk
- Liquidity risk
- Market risk
This note presents information about the Group's exposure to each of the risks above, the Group's objectives, policies,
and processes for measuring and managing risk, and the Group's management of capital. Further quantitative disclosures
are included throughout these Consolidated Financial Statements.
Risk management framework
The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management
framework. The Group's Risk Management Committee is responsible for developing and monitoring the Group's risk
management policies. The Committee reports regularly to the Board of Directors on its activities.
The Group's risk management policies are established to identify and analyze the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training
and management standards and procedures, aims to maintain a disciplined and constructive control environment in which
all employees understand their roles and obligations.
The Group Audit Committee oversees how management monitors compliance with the Group's risk management policies
and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
In addition to the formal oversight performed by the Audit Committee, the Company has in place internal audit processes
which act to monitor management controls and procedures, the results of which are reported to the Audit Committee.
2024 2023Trade payables ................................................................................................................49,734 55,085Current portion of engine overhauls and security deposits from lease contracts ............17,013 10,408Other payables ................................................................................................................174,460 156,921Total trade and other payables ........................................................................................241,207 222,414
2024 2023Sold unused tickets and vouchers ...................................................................................295,981 272,481Frequent flyer points ........................................................................................................28,781 22,137Other prepayments ..........................................................................................................26,813 23,167Total deferred income .....................................................................................................351,575 317,785
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 31 Amounts are in USD thousands
34. Financial risk management, contd.:
a. Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group's cash and cash equivalents, which are kept with local and
international banks with acceptable credit ratings, marketable securities which consist of bonds and bills issued by
Government treasuries, high rated banks and financially strong corporates, as well as receivables from customers.
Exposure to credit risk
The carrying amounts of financial assets represent the maximum credit exposure. The maximum exposure to credit risk
at the reporting date was as follows:
Trade and other receivables and market securities
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of customers and counterparties.
Credit risk is linked to trade receivables, agreements with financial institutions related to hedging and counterparties in
marketable securities. The relative spread of trade receivables across counterparties is crucial for credit risk exposure. The
Group is aware of potential losses related to credit risk exposure and chooses its counterparties subject to business
experience and securities issuers subject to credit ratings and financial strength.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and
other receivables. The main components of this allowance are specific loss components that relate to individually significant
exposures, and a collective loss component established for groups of similar assets in respect of losses that have been
incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics
for similar financial assets.
At year-end 2024, the maximum exposure to credit risk for trade and other receivables and marketable securities by type
of financial instrument was as follows:
Impairment losses
The aging of trade receivables and credit cards at the reporting date was as follows:
Carrying amount Note 2024 2023Non-current receivables and deposits ......................................................21 76,494 43,469Trade and other receivables .....................................................................25 134,603 133,600Derivatives used for hedging ....................................................................34 4,416 791Marketable securities ................................................................................24 104,562 71,008Cash and cash equivalents .......................................................................26 150,235 199,514 470,310 448,382
2024 2023Credit cards .....................................................................................................................19,569 25,661Trade receivables ............................................................................................................53,028 30,54272,597 56,203Marketable securities ......................................................................................................104,562 71,008Other receivables ............................................................................................................87,233 105,720Trade and other receivables, see note 25 .......................................................................264,392 232,931
Allowance for Allowance forGross impairment Gross impairment2024 2024 2023 2023Not past due .......................................................................38,238 92)( 48,883 517)( Past due 1-30 days ............................................................8,640 57)( 3,442 276)( Past due 31-120 days ........................................................20,835 220)( 4,157 1,043)( Past due 121-365 days ......................................................6,046 1,683)( 2,334 1,088)( More than one year ............................................................6,236 5,346)( 4,305 3,994)( Total ...................................................................................79,995 7,398)( 63,121 6,918)(
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 32 Amounts are in USD thousands
34. Financial risk management, contd.:
a. Credit risk, contd.:
Changes in the allowance for impairment in respect of trade receivables during the year were as follows:
A significant part of the balance relates to customers that have a good track record with the Group. But based on historical
default rates and expected credit loss in the future, management believes that minimal impairment allowance is necessary
in respect of trade receivables not past due or past due by 30 days or less.
The allowance account in respect of trade receivables is used to record impairment losses. If the Group believes that no
recovery is possible the gross carrying amount of the financial asset is written off.
Guarantees
The Group's policy is to provide financial guarantees only to wholly owned subsidiaries.
b. Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities, settled by delivering cash or another financial asset at their due date. The Group's approach to managing liquidity
is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
Exposure to liquidity risk
The Group aims to maintain the level of its cash and cash equivalents and marketable securities equal to the estimated
amount of three months' average fixed operating cost, where 30% can be in the form of undrawn lines of credit. At year-
end the Group's cash and cash equivalents amounted to USD 150 million, and USD 105 million of marketable securities
with trusted counterparties, totaling USD 255 million.
The Group's management monitors its cash flow requirements by using a rolling forecast. Liquidity is managed based on
projected cash flows in different currencies.
Following are the contractual maturities of financial liabilities at the reporting date, including estimated interest payments:
2024 2023Balance at 1 January .......................................................................................................6,918 6,319 Impairment loss allowance, increase (decrease) ............................................................1,416 1,262 Amounts written off ..........................................................................................................933)( 426)( Exchange rate difference ................................................................................................3)( 237)( Balance at 31 December .................................................................................................7,398 6,918
((
((
Carrying Contractual Within 12 More than 31 December 2024 amount cash flows months 1-2 years 2-5 years 5 years Non-derivative financial liabilitiesUnsecured bank loans .............8,544 8,983 5,270 2,283 1,430 0 Secured loans .........................197,210 235,975 49,162 41,582 98,706 46,525 Lease liability ...........................465,104 595,314 99,363 96,274 239,001 160,676 Payables and prepayments .....340,755 357,768 258,220 3,107 26,442 69,999 1,011,613 1,198,040 412,015 143,246 365,579 277,200 Derivative financial liabilitiesCommodity derivatives ............6,393) 6,503) 6,814)( 311 0 0 Margin accounts ......................778 778 778 0 0 0 Forward exchange contracts ...4,045 7,223 7,223 0 0 0 - Outflow .................................147,081) 150,207) - Inflow .................................... 150,207)( 0 0 0 Interest rate swaps ..................151,126 157,430 157,430 0 0 0 371 397 177 208 12 0 1,199) 1,895 1,364 519 12 0
(
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 33 Amounts are in USD thousands
34. Financial risk management, contd.:
b. Liquidity risk, contd.:
Undrawn committed credit lines at year-end 2024 amounted to USD 92.0 million (2023: USD 52.0 million).
c. Market risk
Market risk emerges from changes in market prices, such as foreign exchange rates, interest rates, carbon prices and fuel
prices, as those changes will affect the Group's cash flows or the value of its holdings in financial instruments. The objective
of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing
returns. The Company holds some of its financial assets in term deposits, government bonds and rated banks as well as
short-term bills issued by financially strong local corporates. These investments fall within the agreed risk management
policy.
The Group uses spot and forward trading, swaps and options to manage market risks. All such transactions are carried
out within the guidelines set by the Board of Directors. The Group seeks to apply hedge accounting in order to manage
volatility in profit or loss.
Carbon risk
The Group is required to procure three types of emission allowances in relation to its operations: European Carbon
Emission Allowance Futures (EUAs), UK Allowances (UKAs) and Swiss General Unit Allowance (CHUAs). Carbon
emission is calculated in a fixed proportion to the fuel consumption of flights operated within the European continent. Group
mitigates risk associated with carbon emission allowances through opportunistic monthly spot and forward purchases of
allowances to mirror the net shortfall of allowances taking into consideration the Group’s free allowances. Earning returns
on the stock of procured units is a challange as the Emissions Trading System (ETS) accounts don‘t offer interest. Yet
some steps have been taken to this end by lending them to counterparties and selling EUA call options covered with
forward agreements.
Unlike financial derivatives associated with IFRS 9 and Hedge Accounting, such as those instruments covering the market
risk of fuel, currency and interest, forward carbon contracts are not regarded as derivative financial liabilities. This is due
to the underlying exposure being a committment of purchasing goods, i.e. "non-cash receipt" of carbon allowances
Therefore the forward contracts are future committments of buying such goods at fixed forward prices to match the
expensed item. Infact they are kept on the Financial Position amongst Trade and other payables. Further, the acquired
stock position of allowances through spot and forward trading is netted against the expensed actual emission of carbon
and the market value of the contracts is disregarded as it is netted against the expensed commitment.
The prices of all types of allowances have risen substantially in recent years making procurement of emission allowances
a significant and growing cost item. Group enjoys a free allowance of ETS units which covered approx. 34% of the Group’s
total emission allowance needs in 2024. In 2023 the EU announced a plan to accelerate the amortization rate of the 2010
free allowance allocated to airlines. Thus, airlines will be more dependent on carbon trading in near future which will bring
the consequential added costs and volatility of procurement to their production earlier and at a faster pace than planned.
0 0
0
((
Carrying Contractual Within 12 More than 31 December 2023 amount cash flows months 1-2 years 2-5 years 5 years Non-derivative financial liabilitiesUnsecured bank loans .............12,995 13,954 5,269 4,888 3,326 471 Secured loans .........................239,335 289,014 57,535 46,088 126,877 58,514 Guarantees ..............................1,004 1,004 1,004 0 0 0 Lease liability ...........................386,250 472,232 75,017 71,281 182,172 143,762 Payables and prepayments .....276,366 286,774 232,822 9,897 5,392 38,663 915,950 1,062,978 371,647 132,154 317,767 241,410 Derivative financial liabilitiesCommodity derivatives ............6,343)( 6,892)( 6,639)( 253)( Margin accounts ......................0 0 0 0 0 0 Forward exchange contracts ...255)( 2,778 2,778 0 0 - Outflow .................................108,795) 111,476) 111,476)( 0 0 0 - Inflow ....................................108,540 114,254 114,254 0 0 0 Interest rate swaps ..................791 791 136 473 182 0 5,807) 3,323) 3,725)( 220 182 0
((
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 34 Amounts are in USD thousands
34. Financial risk management, contd.:
c. Market risk, contd.:
Another recent aspect of carbon risk is CORSIA which is an international emission trading system based on an agreement
by ICAO members to offset carbon emissions according to compliance benchmarks set up in phases. 2024 is the first year
of Phase I which succeeds the Pilot Phase of which Group was also a participant. No benchmark was breached during the
Pilot Phase but some costs of necessary procurement of verified carbon credits are expected in 2024-2026 to be
surrendered in 2027. Flights committed to the ETS are exempt so the new legislation effects most importantly Group flights
to North America.
Fuel risk
The Group is exposed to fuel price risk. The Group's fuel price risk management strategy aims to provide the airline with
protection against sudden and significant increases in oil prices while ensuring that the airline is not competitively
disadvantaged in the event of a substantial price fall. The Group strategy is to hedge between 20% and 50% of estimated
fuel consumption 6 months forward, 0-40% 7-12 months forward and 0-20% 13-18 months forward.
The hedging policy allows for both swaps and options traded with approved counterparties and within approved limits.
Sensitivity analysis
The following table demonstrates the sensitivity of the financial instruments in place at year-end to a reasonably possible
change in fuel prices, with all other variables held constant, on equity:
At year-end 2024 all open hedge postions were effective. Changes in their market value are therefore confined to equity
until settlement.
Currency risk
The Group is exposed to risk associated with cash flow and Financial position items that are denominated in currencies
other than the functional currencies of Group entities.
The Group seeks to reduce the risk arising from such a currency mismatch in the cash flow by netting receivables and
payments in each individual currency and by internal trading within the Group. The shortfall of ISK is financed by a surplus
of European and American currencies. A relatively high level of ISK is kept on the Financial Position to counter Financial
Position currency mismatch, but further to serve the purpose as a reserve holding for ISK payments. Lastly the ISK has a
nature of being a high interest currency which benefits yield returns on those assets.
Exposure to currency risk
The Group's exposure to currency risk in it's major currencies is as follows:
Effect on equity2024 2023Increase in fuel prices by 10% ........................................................................................11,421 8,822 Decrease in fuel prices by 10% .......................................................................................11,421 )( 8,822 )(
2024ISK EUR GBP DKK NOK/SEK CADReceivables / payables, net ....52,068 )( 7,465 )( 7,579 )( 676 )( 2,033 )( 2,151 Marketable securities ..............104,562 0 0 0 0 0 Cash and cash equivalents .....36,526 14,552 3,949 921 2,654 5,125 Secured bank loans .................0 31,074 )( 0 0 0 0 Unsecured loans .....................5,754 )( 0 0 0 0 0 Long-term Subordinated loan ..75,066 0 0 0 0 0 Lease receivables ...................0 0 89 0 0 0 Lease liabilities ........................128,328 )( 105 )( 195 )( 59 )( 0 0 Tax carrying forward ................70,892 0 0 0 0 0 Forward exchange contracts ...157,685 9,894 )( 20,066 )( 6,284 )( 10,342 )( 19,828 )( Net statement of financial position ....................258,581 33,986 )( 23,802 )( 6,098 )( 9,721 )( 12,552 )( Next 12 months forecast sales ........................239,762 205,742 89,101 24,300 51,841 93,961 Next 12 months forecast purchases ................536,167 )( 185,095 )( 51,403 )( 17,134 )( 14,279 )( 21,418 )( Capex thereof ........................15,000 )( 0 0 0 0 0 Currency exposure ..................37,824 )( 13,339 )( 13,896 1,068 27,841 59,991
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 35 Amounts are in USD thousands
34. Financial risk management, contd.:
c. Market risk, contd.:
Sensitivity analysis
A 10% strengthening of the USD against the following currencies at 31 December would have increased (decreased) post-
tax equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular
interest rates, remain constant and omits the impact of deferred tax assets at the reporting date.
A 10% weakening of the USD against the above currencies would have had the equal but opposite effect on the above
currencies to the amounts shown above, on the basis that all other variables remain constant.
2023ISK EUR GBP DKK NOK/SEK CADReceivables / payables, net ....27,944 )( 3,836 )( 6,922 )( 745 )( 1,798 )( 1,348 )( Marketable securities ..............71,008 0 0 0 0 0 Cash and cash equivalents .....37,869 10,999 6,826 931 5,622 8,258 Secured bank loans .................0 39,729 )( 0 0 0 0 Unsecured loans .....................3,867 )( 0 0 0 0 0 Long-term Subordinated loan ..70,330 0 0 0 0 0 Lease receivables ...................0 0 224 0 0 0 Lease liabilities ........................111,357 )( 132 )( 438 )( 151 )( 0 0 Tax carrying forward ................84,152 0 0 0 0 0 Forward exchange contracts ...110,644 16,577 )( 19,103 )( 12,602 )( 16,361 )( 21,986 )( Net statement of financial position ....................230,835 49,275 )( 19,413 )( 12,567 )( 12,537 )( 15,076 )( Next 12 months forecast sales ........................234,274 213,696 88,644 25,327 52,237 85,478 Next 12 months forecast purchases ................545,140 )( 168,340 )( 22,173 )( 10,544 )( 4,780 )( 13,075 )( Capex thereof ........................32,000 )( 0 0 0 0 0 Currency exposure ..................80,031 )( 3,919 )( 47,058 2,216 34,920 57,327
The following significant exchange rates of USD applied during the year:
Average rateYear-end spot rate2024 2023 2024 2023ISK .....................................................................................0.0072 0.0072 0.0072 0.0073EUR ..................................................................................1.08 1.08 1.04 1.11GBP ...................................................................................1.28 1.24 1.25 1.27CAD ...................................................................................0.73 0.74 0.70 0.76DKK ....................................................................................0.15 0.15 0.14 0.15SEK ....................................................................................0.09 0.09 0.09 0.10
TotalDirectly in Profit or effect on 2024equity loss equityISK ............................................................................................................18,620 )( 2,066 )( 20,686 )( EUR ..........................................................................................................792 1,927 2,719 GBP ..........................................................................................................1,605 299 1,904 DKK ..........................................................................................................503 15 )( 488 NOK/SEK ..................................................................................................827 50 )( 778 CAD ..........................................................................................................1,586 582 )( 1,004 2023ISK ............................................................................................................14,478 )( 3,989 )( 18,467 )( EUR ..........................................................................................................1,326 2,616 3,942 GBP ..........................................................................................................1,528 25 1,553 DKK ..........................................................................................................1,008 3 )( 1,005 NOK/SEK ..................................................................................................1,309 306 )( 1,003 CAD ..........................................................................................................1,759 553 )( 1,206
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 36 Amounts are in USD thousands
34. Financial risk management, contd.:
c. Market risk, contd.:
Interest rate risk
Interest rate risk is the potential that a change in market interest rates will reduce the value of a bond or other fixed rate
instruments. The fair value of fixed rate instruments and the cash flow of variable rate instruments will fluctuate with
changes in market interest rates. The Group follows a policy of hedging 40-80% of the net interest rate cash flow exposure
of long-term loans with up to a 5-year horizon.
At the reporting date the interest rate profile of the Group´s interest bearing financial instruments was as follows:
Fair value sensitivity analysis for fixed rate instruments
The Group designates derivatives for the purpose of fuel, carbon, currency and interest rate hedging as instruments under
a fair value hedge accounting model. As such, market rates affect the mark to market of the derivatives and the market
value of fixed rate financial assets. In addition, interest rate changes affect the fixed rate instruments carrying amount
through equity.
A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or
loss by the amounts stated below. This analysis assumes that all other variables, in particular foreign exchange rates,
remain constant.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or
loss by the amounts stated below. This analysis assumes that all other variables, in particular foreign currency rates, remain
constant.
Fixed rate instrumentsAmount2024 2023Commodity derivatives and forward exchange contracts (Carrying amount) ..................2,611 )( 6,885 )( Interest rate swaps (Notional amount) ............................................................................11,195 )( 20,556 )( 13,806 )( 27,441 )( Variable rate instrumentsFinancial assets (Carrying amount) .................................................................................254,797 270,522 Financial liabilities (Carrying amount) .............................................................................205,754 )( 252,330 )( 49,043 18,192
100 bp 100 bp 31 December 2024increase decrease Commodity derivatives and forward exchange contracts ................................................17 17 )( Interest rate swaps ..........................................................................................................220 228 )( Fair value sensitivity (net) ................................................................................................237 245 )( 31 December 2023Commodity derivatives and forward exchange contracts ................................................44 44 )( Interest rate swaps ..........................................................................................................484 503 )( Fair value sensitivity (net) ................................................................................................527 548 )(
100 bp 100 bp 31 December 2024increase decrease Variable rate instruments ................................................................................................392 392 )( Cash flow sensitivity (net) ................................................................................................392 392 )( 31 December 2023Variable rate instruments ................................................................................................146 146 )( Cash flow sensitivity (net) ................................................................................................146 146 )(
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 37 Amounts are in USD thousands
34. Financial risk management, contd.:
c. Market risk, contd.:
Hedge accounting
The Hedge Accounting Standards of IFRS 9 require hedge instruments to fulfill certain criteria so that the market value of
open hedge positions can be allocated to equity as hedge reserves until settlement day. One of these qualifications is the
requirement of effectiveness of the financial instrument against the identified exposure. The exposure in terms of cash
flows has to be considered highly likely on the basis of a robust forecast of operations. All outstanding hedge contracts are
effective.
Following table shows effective and ineffective hedges:
Climate risk
Climate change poses a financial risk to airlines. The potential for new regulations and taxes aimed at reducing carbon
emissions, as well as the increasing costs associated with transitioning to low-carbon fuels, can have a material impact on
the Company’s financial performance. 2024 was the first year of CORSIA phase I compliance and 2025 will be the first
year of SAF compliance. Climate-related physical risks, such as extreme weather events, also have the potential to disrupt
operations and damage infrastructure. Additionally, the industry in general faces reputational risks as consumers become
more conscious of the environmental impact of their travel choices. To mitigate these financial risks, Group has
implemented strategies to reduce carbon emissions.
35. Financial instruments and fair value
The fair value of financial assets and liabilities, together with the carrying amounts shown in the Statement of Financial
Position, are as follows. The table does not include fair value information for financial assets and liabilities measured at
fair value if the carrying amount is a reasonable approximation of fair value:
Fair value hierarchy
The table below analyses the fair value of assets and liabilities and their levels in the fair value hierarchy:
31 December 20241-6 months 7-12 months > 13 months TotalFuel ...................................................................................5,085 )( 1,564 )( 256 6,393 )( Currency ............................................................................3,070 975 0 4,045 Interest rate swap ..............................................................92 79 200 371 Margin accounts .................................................................778 0 0 778 Total derivatives .................................................................1,145 )( 510 )( 456 1,199 )( Tax .....................................................................................385 102 91 )( 395 Derivatives used for hedging, Equity .................................1,538 )( 408 )( 365 1,582 )(
Carrying Carrying amount Fair value amount Fair value 2024 2024 2023 2023Derivatives used for hedging .............................................1,199 )( 1,199 )( 5,807 )( 5,807 )( Unsecured bond issue .......................................................8,544 )( 8,182 )( 12,995 )( 12,285 )( Secured loans ....................................................................197,210 )( 202,186 )( 239,335 )( 249,713 )( Lease liabilities ..................................................................465,104 )( 465,104 )( 386,250 )( 386,250 )( Total ...................................................................................672,057 )( 676,671 )( 644,387 )( 654,055 )(
31 December 2024Financial assets Level 1 Level 2 Level 3 TotalDerivatives used for hedging .............................................4,416 4,416 0 4,416 0 4,416 Financial liabilitiesUnsecured bond issue .......................................................8,182 )( 8,182 )( Secured loans ....................................................................202,186 )( 202,186 )( Lease liabilities ..................................................................465,104 )( 465,104 )( Derivatives used for hedging .............................................5,615 )( 5,615 )( 0 5,615 )( 675,472 )( 681,087 )(
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 38 Amounts are in USD thousands
35. Financial instruments and fair value, contd.:
Fair value hierarchy, contd.:
Non-derivative financial liabilities
Fair value, as determined for disclosure purposes, is calculated based on the present value of future principal and interest
cash flows, discounted at market rates as at the reporting date. In respect of the liability component of convertible notes,
the market rate of interest is determined by reference to similar liabilities that do not have a conversion option.
Derivatives
The fair value of forward exchange contracts is based on their quoted price, if available. If a quoted price is not available,
then fair value is estimated by discounting the difference between the contractual forward price and the current forward
price for the residual maturity of the contract. This methodology is also used when valuating commodity forwards and
swaps.
The fair value of interest rate swaps is based on broker quotes. If not available the fair value is based on the discounted
cash flow difference of the contractual fixed interest payment and the floating interest receivable.
Fair value reflects the credit risk of the instrument and includes adjustments to take account of the credit risk of the Group
entities and counterparties when appropriate.
36. Capital commitments
On 6 July 2023, the Group finalized the purchase agreement for up to 25 A321XLR aircraft from Airbus. The order consists
of 13 firm orders and purchase rights for up to 12 additional aircraft. The aircraft deliveries will commence in 2029. In
addition the Group has also concluded long-term agreements for seven new A321LR aircraft, five with SMBC Aviation
Capital Limited and two with CDB Aviation. Of these seven new A321LR´s, first one was delivered in Q4-2024, but the
remaining six are scheduled for delivery to the Route network as demonstrated in the table in note 12.
37. Related parties
Identity of related parties
The Group has a related party relationship with its shareholders with significant influence, subsidiaries, associates, and
with its directors and executive officers.
Transactions with management and key personnel
Salaries and benefits of management for their service to Group companies and the number of shares in the Company held
by management are specified below.
31 December 2023Financial assets Level 1 Level 2 Level 3 TotalDerivatives used for hedging .............................................791 791 0 791 0 791 Financial liabilitiesUnsecured bond issue .......................................................12,285 )( 12,285 )( Secured loans ....................................................................249,713 )( 249,713 )( Lease liabilities ..................................................................386,250 )( 386,250 )( Derivatives used for hedging .............................................6,598 )( 6,598 )( 0 6,598 )( 648,248 )( 654,846 )( The basis for determining the levels is disclosed in note 4.
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 39 Amounts are in USD thousands
At the Company's Annual General Meeting in 2022 it was approved to implement a share-based incentive program for the
senior leadership team and other selected key employees. In 2024, 385,300,000 stock options were granted to a total of
51 employees based on the program.
Transactions with associates
The Group's purchases and sales to associates were immaterial for the year 2024. In year 2024 the Group converted a
long term receivable on its associate Lindarvatn into share capital amounted to USD 22.9 million.
Transactions with shareholders
There are no shareholders with significant influence at the year-end 2024. Companies which members of the Board and
Executive Committee members control have been identified as being thirteen. These companies have been identified as
related. Transactions with them were immaterial in 2024.
38. Litigations and claims
Icelandair ehf. has received compensation claims from cabin crew members for bodily due to alleged lack of air quality
inside Icelandair's aircraft. Icelandair has rejected the claims since there is no evidence of lack of air quality in the
Company's aircraft or any evidence linking such alleged lack of air quality to the bodily injury of claimants.
37. Related parties, contd.: Incentive Number of Stock payments shares options Salaries Pension for held at held at 2024and contri- previous year-end year-end in Board of Directors: benefits bution year thousands * thousands Guðmundur Hafsteinsson, Chairman ..........79.2 9.1 8,555 Nina Jonsson, Vice Chairman .....................70.5 8.1 John F. Thomas ..........................................56.5 6.5 3,395 Matthew Evans ............................................43.5 5.0 Svafa Grönfeldt ...........................................43.5 5.0 12,500 Executive Committee:Bogi Nils Bogason Group CEO ...................452.7 80.9 42.4 23,625 44,200 Seven members of Executive Committee ...1,874.0 337.8 149.2 32,574 170,600 Executive Committee (male / female) ......... 5/32023Board of Directors:Guðmundur Hafsteinsson, Chairman ..........77.7 8.9 8,555 Nina Jonsson, Vice Chairman .....................69.4 8.0 John F. Thomas ..........................................55.8 6.4 3,395 Matthew Evans ............................................42.8 4.9 Svafa Grönfeldt ...........................................42.8 4.9 12,500 Executive Committee:Bogi Nils Bogason Group CEO ...................424.9 101.6 48.9 23,625 22,100 Eight members of Executive Committee .....1,871.8 346.1 228.3 32,574 81,700 Executive Committee (male / female) ......... 5/3* Including financially related
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 40 Amounts are in USD thousands
39. Group entities
The Company held the following significant subsidiaries at year-end 2024 which are all included in the Consolidated
Financial Statements:
The subsidiaries further own seven minor operating companies that are also included in the Consolidated Financial
Statements.
40. Ratios
The Group's primary ratios at year end are specified as follows:
41. Investment and financing without cash flow effect
Many investing and financing activities do not have a direct impact on current cash flows although they do affect the capital
and asset structure of the Group and should be excluded from the statements of cash flows. The exclusion of non-cash
transactions from the statement of cash flows as these items do not involve cash flows in the current period.
42. Significant accounting policies
The accounting policies set out in this note have been applied consistently to all periods presented in these consolidated
financial statements and have been applied consistently by Group entities.
a. Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has right to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The
financial statements of subsidiaries are included in the consolidated statements from the date on which control commences
until the date on which control ceases. When the Group loses control over subsidiary, it derecognizes the assets and
liabilities of the subsidiary, and any related NCI and other compnonents of equity. Any resulting gain or loss is recognized
in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
(ii) Investment in associates
Associates are those entities in which the Group has significant influence, but not control, over the financial and operating
policies. Interests in associates are accounted for using the equity method. They are initially recognized at cost, which
includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group's
share of the profit or loss and other comprehensive income of associates, until the date on which significant influence
ceases.
Ownership interest2024 2023Passenger and cargo operations IceCap Insurance PCC Ltd. .........................................................................................100% 100% Iceeignir ehf. ................................................................................................................100% 100% Icelandair ehf. .............................................................................................................100% 100% CAE Icelandair Flight Training ehf. ........................................................................67% 67% Flugfélag Íslands ehf. .............................................................................................100% 100% Icelandair Cargo ehf. ..............................................................................................100% 100% FERIA ehf. ...................................................................................................................100% 100% Loftleiðir - Icelandic ehf. .............................................................................................100% 100%
2024 2023Current ratio ............................................................................................................0.63 0.71Equity ratio ..............................................................................................................0.16 0.19Intrinsic value of share capital .................................................................................0.87 0.93
Investment and financing without cash flow effect: 2024 2023Acquisition of right-of-use assets .................................................................17 113,238 )( 72,361 )( New or renewed leases ................................................................................30 141,501 85,961 Non-current receivables ...............................................................................28,263 )( 13,600 )( Investment in associates ..............................................................................22,917 )( 0 Trade and other receivables ........................................................................22,917 0
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 41 Amounts are in USD thousands
42. Significant accounting policies, contd.:
b. Currency exchange
(i) Currency transactions
Transactions in currencies other than functional currencies (foreign currencies) are translated to the respective functional
currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated
in currencies at the reporting date are translated to the functional currency at the exchange rate at that date. The currency
gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the
year, adjusted for effective interest and payments during the year, and the amortized cost in currency translated at the
exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to
the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign
currency that are measured based on historical cost are translated using the exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are recognized in profit or loss, except for differences arising on a
financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective
or qualifying cash flow hedges to the extent the hedge is effective, which are recognized in other comprehensive income.
(ii) Subsidiaries with other functional currencies
Assets and liabilities of foreign operations and subsidiaries with functional currencies other than USD, including goodwill
and fair value adjustments arising on acquisitions, are translated to USD at exchange rates at the reporting date. Income
and expenses are translated to USD at exchange rates at the dates of the transactions. Currency differences arising on
translation are recognized in other comprehensive income. When an operation is disposed of, in part or in full, the relevant
amount in the currency translation reserve within equity is transferred to profit or loss as part of the profit or loss on disposal.
(ii) Subsidiaries with other functional currencies, contd.:
Currency differences are recognized in other comprehensive income, and presented in the translation reserve in equity.
However, if the operation is not a wholly owned subsidiary, then the relevant proportion of the translation difference is
allocated to the non-controlling interests.
c. Operating income
(i) Transport revenue
Passenger ticket sales are recognized as revenue when transportation has been provided. Sold refundable documents not
used within six months after expected transport are recognized as revenue. Non-refundable documents are recognized as
revenue two months after expected transport if not used. Revenue from mail and cargo transportation is recognized when
transportation has been provided.
(ii) Customer loyalty programmes
For customer loyalty programmes, the fair value of the consideration received or receivable in respect of the initial sale is
allocated between the award credits (frequent flyer points) and other components of the sale. Awards can also be
generated through transportation services supplied by the Group. Through transportation services the amount allocated to
the points is estimated by reference to the fair value of the services for which they could be redeemed, since the fair value
of the points themselves is not directly observable. The fair value of the services is calculated taking into account the
expected redemption rate and timing of the redemptions. The amounts are deferred and revenue is recognized only when
the points are redeemed and the Group has fulfilled its obligations to provide the services. The amount of revenue
recognized in those circumstances is based on the number of points that have been redeemed in exchange for services,
relative to the total number of points that is expected to be redeemed.
(iii) Aircraft and aircrew lease
Revenue from aircraft and aircrew lease is recognized in profit or loss when the service has been provided and IFRS 16
Lease standard does not apply.
(iv) Other operating revenue
Revenue includes revenue from tourism, sales at airports and hotels, maintenance service sold and other revenue.
Revenue is recognized in profit or loss when the service has been provided or sale completed by delivery of products.
Gain on sale of operating assets is recognized in profit or loss when the risks and rewards of ownership are transferred to
the buyer.
d. Employee benefits
(i) Short-term employee benefits
Short-term employee benefits are expensed when the related service is provided. A liability is recognized for the amount
expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 42 Amounts are in USD thousands
42. Significant accounting policies, contd.:
d. Employee benefits, contd.:
(ii) Defined contribution plans
Obligations for contributions to defined contribution plans are epensed when the related service is provided.
e. Leases
At inception of a contract, the Group assesses whether a contract is, or contains a lease. A contract is, or contains a lease
if the contract conveys the right of control the use of identified asset for a period of time in exchange for consideration. To
assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of lease
in IFRS 16.
(i) As a lessee
The Group recognizes a right-of-use asset and lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made
at or before the commencement date, plus any initial direct costs incurred an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives receivable.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end
of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term
or the cost of the right of use asset reflects that the Group will exercise a purchase option. In that case the right-of-use
asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of
property and equipment. In addition, the right-of-use asset is periodically reduced by impairment leases, if any and adjusted
for certain remeasurements of the lease liability.
(i) As a lessee, contd.:
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group´s
incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources
and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
- fixed payments, including in-substance fixed payments;
- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date;
- amounts expected to be payable under a residual value guarantee; and
- the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an
optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early
termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, if there is a change in the Group´s estimate of
the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it
will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-
of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The
extension options held are exercisable by the Group only and not by the lessors. The Group assesses whether such an
option is reasonably certain to be exercised at the lease commencement date. A reassessment is made in case of a
significant event or significant changes in circumstances within the Group’s control.
A sales and leaseback transaction is one where the Group sells and asset and immediately reacquires the use of the asset
by entering into a lease agreement. Any profit from the sale is deferred and amortized over the lease term.
(ii) Short-term leases and leases of low value
The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value asset and short-
term leases, including IT equipment. The Group recognizes the lease payments associated with these leases as an
expense on a straight-line basis over the lease term.
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 43 Amounts are in USD thousands
42. Significant accounting policies, contd.:
e. Leases, contd.:
(iii) As a lessor
At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the
contract to each lease component on the basis of their relative stand-alone prices.
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating
lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks
and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not then
it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for
the major part of the economic life of the asset.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It
assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not
with reference to the underlying asset. If head lease is a short-term lease to which the Group applies the exemption
described above, then it classifies the sub-lease as an operating lease.
If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the consideration
in the contract.
The Group applies the derecognition and impairment requirements in IFRS 9 to the net investment in the lease. The Group
further regularly reviews estimated unguaranteed residual values used in calculating the gross investment in the lease.
The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease
term as part of 'other revenue.
(ii) As a lessor, contd.:
Generally, the accounting policies applicable to the Group as a lessor in the comparative period were not different from
IFRS 16 except for the classification of the sub-lease entered into during current reporting period that resulted in a finance
lease classification.
f. Finance income and finance cost
Finance income comprises interest income on funds invested, dividend income, foreign currency gains, and gains on
hedging instruments that are recognized in profit or loss. Interest income is recognized as it accrues in profit or loss, using
the effective interest method. Dividend income is recognized in profit or loss on the date that the Group's right to receive
payment is established.
Finance cost comprise interest expense on borrowings, unwinding of discounts on provisions, foreign currency losses,
impairment losses recognized on financial assets, and losses on hedging instruments that are recognized in profit or loss.
Borrowing costs that are not directly attributable to the acquisition of a qualifying asset are recognized in profit or loss using
the effective interest method.
Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on
whether currency movements are in a net gain or net loss position.
g. Income tax
Income tax comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to items
recognized directly in equity or in other comprehensive income.
Current tax is expected tax payable on taxable income for the year using tax rates enacted at the reporting date.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for goodwill not
deductible for tax purposes, the initial recognition of assets or liabilities that do not affect accounting, or taxable profit or
differences relating to investment in subsidiaries.
h. Inventories
Goods for resale and supplies are measured at the lower of cost and net realisable value. The cost of inventories is based
on first-in first-out principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing
location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and selling expenses.
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 44 Amounts are in USD thousands
42. Significant accounting policies, contd.:
i. Operating assets
(i) Recognition and measurement
Items of operating assets are measured at cost less accumulated depreciation and accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working
condition for their intended use.
When parts of an item of operating assets have different useful lives, they are accounted for as separate items (major
components) of operating assets.
Any gain and loss on disposal of an item of operating assets (calculated as the difference between the net proceeds from
disposal and the carrying amount of the item) is recognized in profit or loss.
(ii) Aircraft and flight equipment
Aircraft and flight equipment, e.g. aircraft engines and aircraft spare parts, are measured at cost less accumulated
depreciation and accumulated impairment losses. When an aircraft is acquired the purchase price is divided between the
aircraft itself and engines. Aircraft is depreciated over the estimated useful life of the relevant aircraft until a residual value
is met. Engines are depreciated according to actual usage based on cycles flown. When an engine is overhauled the cost
of the overhaul is capitalised and the remainder of the cost of the previous overhaul that has not already been depreciated,
if any, is expensed in full.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it is probable that future economic benefits associated with the
expenditure will flow to the Group. Ongoing repairs and maintenance is expensed as incurred.
(iv) Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are
assessed and if a component has a useful life that is different from the remainder of that asset, that component is
depreciated separately.
Items of operating assets are depreciated on a straight-line basis in profit or loss over the estimated useful lives of each
component unless other systematic method is considered appropriate. Leased assets are depreciated over the shorter of
the lease term or their useful lives. The estimated useful lives for the current and comparative periods are as follows:
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
j. Intangible assets and goodwill
(i) Goodwill and other intangible assets with indefinite useful lives
All business combinations are accounted for by applying the purchase method. Goodwill represents amounts arising on
acquisition of subsidiaries. In respect of business acquisitions goodwill represents the difference between the cost of the
acquisition and the fair value of the net identifiable assets acquired.
Goodwill is measured at cost less accumulated impairment losses. Goodwill is allocated to cash-generating units and is
tested annually for impairment.
Goodwill, trademarks and airport slots with indefinite useful lives are stated at cost less accumulated impairment losses.
Useful lifeAircraft and flight equipment ............................................................................................................3-17 yearsEngines ............................................................................................................................................Cycles flownBuildings ..........................................................................................................................................17-50 yearsOther property and equipment .........................................................................................................3-20 years
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 45 Amounts are in USD thousands
42. Significant accounting policies, contd.:
j. Intangible assets and goodwill, contd.:
(ii) Other intangible assets
Other intangible assets acquired by the Group and have finite useful lives are measured at cost less accumulated
amortisation and impairment losses. Amortisation is recognized in profit or loss on a straight-line basis over the estimated
useful lives since this most closely reflects the expected pattern of consumption of the future economic benefits embodied
in the asset. The estimated useful lives for the current and comparative years are as follows:
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset
to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized
in profit or loss as incurred.
k. Financial instruments
(i) Non-derivative financial assets
Trade receivables and debt securities are initially recognized when they are originated. All other financial assets and
financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially
measured at fair value plus, for an item not at fair value through profit or loss, transaction costs that are directly attributable
to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the
transaction price.
The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or
it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards
of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the
risks and rewards of ownership and it does not retain control of the financial asset.
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when,
and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them
on a net basis or to realise the asset and settle the liability simultaneously.
The Group classifies non-derivative financial assets into the following categories: financial assets at fair value through
profit or loss and financial assets measured at amortized cost.
Financial assets at fair value through profit or loss
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are
measured at FVTPL. These assets are subsequently measured at fair value. Net gains and losses, including any interest
or dividend income, are recognized in profit or loss.
Financial assets at fair value through profit or loss comprise marketable securities actively managed by the Group's
treasury department to address short-term liquidity needs.
Financial assets measured at amortized cost
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at
FVTPL:
– it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding. Financial assets
These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is
reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit
or loss. Any gain or loss on derecognition is recognized in profit or loss.
Financial assets measured at amortized cost comprise cash and cash equivalents and trade and other receivables.
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.
Useful lifeSoftware ...........................................................................................................................................3 yearsOther intangible assets ....................................................................................................................6-10 years
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 46 Amounts are in USD thousands
42. Significant accounting policies, contd.:
k. Financial instruments, contd.:
(ii) Non-derivative financial liabilities
The Company initially recognizes debt securities issued on the date that they are originated. All other financial liabilities
are recognized initially on the trade date at which the Company becomes a party to the contractual provisions of the
instrument.
The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The
Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are
substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.
The Company classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities
are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these
financial liabilities are measured at amortized cost using the effective interest method.
Financial liabilities other than derivatives comprise loans and borrowings and trade and other payables.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and
only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the
asset and settle the liability simultaneously.
(iii) Derivative financial instruments and hedge accounting
The Group holds derivative financial instruments to hedge its foreign currency, fuel price and interest rate risk exposures
(see note 34). Derivatives are recognized initially at fair value; attributable transaction costs are recognized in profit or loss
as incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally
recognized in profit or loss. The Group holds no trading derivatives.
(iv) Derivative financial instruments and hedge accounting, contd.:
On initial designation of the derivative as a hedging instrument, the Group formally documents the relationship between
the hedging instrument and hedged item, including the risk management objectives and strategy in undertaking the hedge
transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of the hedging
relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing
basis, whether the hedging instruments are expected to be highly effective in offsetting the changes in the fair value or
cash flows of the respective hedged items during the period for which the hedge is designated, and whether the actual
results of each hedge are within a range of 80-125 percent. For a cash flow hedge of a forecast transaction, the transaction
should be highly probable to occur and should present an exposure to variations in cash flows that ultimately could affect
reported profit or loss.
Cash flow hedges
When a derivative is designated as a cash flow hedging instrument in a hedge of the variability in cash flows attributable
to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction that could affect
profit or loss, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive income
and accumulated in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is
recognized immediately in profit or loss.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying amount of the
asset when the asset is recognized. In other cases the amount accumulated in equity is reclassified to profit or loss in the
same period during which the hedged item affects profit or loss. If the hedging instrument no longer meets the criteria for
hedge accounting, expires or is sold, terminated or exercised, or the designation is revoked, then hedge accounting is
discontinued prospectively. If the hedged future cash flows is no longer expected to occur, then the amounts that have
been accumulated in the hedging reserve and the cost of hedging reserve are immediately reclassified to profit or loss.
Net investment hedges
When a non-derivative financial liability is designated as the hedging instrument in a hedge of a net investment in a foreign
operation, the effective portion of foreign exchange gains and losses is recognized in other comprehensive income and
presented in the translation reserve within equity. Any ineffective portion of the changes in the fair value of foreign exchange
gains and losses on the non-derivative is recognized immediately in profit or loss. The amount recognized in other
comprehensive income is reclassified to profit or loss as a reclassification adjustment on disposal of the foreign operation.
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 47 Amounts are in USD thousands
42. Significant accounting policies, contd.:
k. Financial instruments, contd.:
Other non-trading derivatives
When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge accounting, all
changes in its fair value are recognized immediately in profit or loss.
Warrants are free standing financial instruments that are legally detachable and separately exercisable from the underlying
shares. Pursuant to the requirements of IAS 32 Financial instruments: Presentation, the warrants are classified as financial
liabilities because their exercise price is denominated in ISK, the Company's functional currency is USD and the Company
did not offer the warrants pro rata to all of its existing shareholders. The outstanding warrants are recognized as warrant
liabilities in the Consolidated Statement of Financial Position and are measured at their fair value on their issuing date and
are subsequently measured at each reporting period with changes in fair value being recorded as a component of Change
in fair value in the Consolidated Income Statement and other Comprehensive Income according to IFRS 13, Fair Value
Measurement.
l. Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are
recognized as a deduction from equity, net of any tax effects.
Repurchase and reissue of share capital
When share capital recognized as equity is repurchased, the amount of the consideration paid, which includes directly
attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as
treasury shares and are presented as a deduction from total equity. When treasury shares are sold or reissued
subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the
transaction is presented in share premium.
m. Impairment
(i) Non-derivative financial assets
A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether
there is objective evidence that it is impaired. A financial asset is impaired if there is objective evidence of impairment as a
result of one or more events that have occurred after the initial recognition of the asset, and that loss event had an impact
on the estimated future cash flows of that asset which can be estimated reliably.
Objective evidence that financial assets are impaired includes:
- Default or delinquency by a debtor;
- Restructuring of an amount due to the Group on terms that the Group would not consider otherwise;
- Indications that a debtor or issuer will enter bankruptcy;
- Adverse changes in the payment status of borrowers or issuers;
- The disappearance of an active market for a security because of financial difficulties; or
- Observable data indicating that there is a measurable decrease in the expected cash flows from a group of financial
assets.
(i) Non-derivative financial assets, contd.:
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its
carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest
rate. Losses are recognized in profit or loss and reflected in an allowance account against receivables. Interest on the
impaired asset continues to be recognized. When an event occurring after the impairment recognized causes the amount
of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
(ii) Non-financial assets
The carrying amounts of the Group's non-financial assets, other than inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated. Goodwill and indefinite-lived intangibles assets are tested annually for
impairment. An impairment loss is recognized if the carrying amount of an asset or cash-generating unit (CGU) exceeds
its recoverable amount.
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 48 Amounts are in USD thousands
42. Significant accounting policies, contd.:
m. Impairment, contd.:
(ii). Non-financial assets, contd.:
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of
impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.
Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has
been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which
goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups
of CGUs that are expected to benefit from the synergies of the combination.
Impairment losses are recognized in profit or loss. Impairment losses recognized in respet of CGUs are allocated first to
reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts
of other assets in the CGU (group of CGUs) on a pro rata basis.
An impairment loss is recognized if the carrying amount of an asset or cash-generating unit exceeds its estimated
recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of cash-
generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce
the carrying amount of other assets in the unit (group of units) on a pro rata basis.
The Group's corporate assets do not generate separate cash inflows and are utilised by more than one CGU. Corporate
assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the
CGU to which the corporate asset is allocated.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the
extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognized.
n. Provisions
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can
be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability.
Overhaul commitments relating to aircraft under operating leases
With respect to the Group´s operating lease agreements, where the Group has a commitment to maintain the aircraft,
provision is made during the lease term for the obligation based on estimated future cost of major airframe and certain
engine maintenance checks by making appropriate charges to the profit or loss calculated by reference to the number of
hours or cycles operated.
Provisions are entered into the statement of financial position among non-current and current payables, as applicable.
o. Deferred income
Sold unused tickets, fair value of unutilized frequent flyer points and other prepayments are presented as deferred income
in the statement of financial position.
Icelandair's frequent flyer program
Frequent flyer points earned or sold are accounted for as a liability on a fair value basis of the services that can be
purchased for the points. The points are recognized as revenue when they are utilized or when they expire.
p. Deferred tax asset
A deferred tax asset is recognized for unused tax losses and deductible temporary differences, to the extent that it is
probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using tax rates enacted at the reporting date.
Notes, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 49 Amounts are in USD thousands
42. Significant accounting policies, contd.:
q. Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding during the year, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for
treasury shares held, for the effects of all dilutive potential ordinary shares.
r. Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenue
and incur expenses, including revenue and expenses that relate to transactions with any of the Group's other components.
An operating segment's operating results are reviewed regularly by the CEO to make decisions about resources to be
allocated to the segment and assess its performance, and for which discrete financial information is available. The major
revenue-earning assets of the Group is the aircraft fleet, the majority of which is registered in Iceland. Since the Group's
aircraft fleet is employed flexibly across its route network, there is no suitable basis of allocating such assets and related
liabilities to geographical segments.
Inter-segment pricing is determined on an arm's length basis.
Segment results, reported to the CEO include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly investments and related revenue, loans and borrowings and
related expenses, corporate assets and head office expenses, and income tax assets and liabilities.
43. Standards issued but not yet effective
A number of new standards are effective for annual periods beginning after 1 January 2025 and earlier application is
permitted. However, the Group has not early adopted the following new or amended standards in preparing these
Consolidated Financial Statements.
The following amended standards and interpretations are not expected to have a significant impact on the Group's
Consolidated Financial Statements.
- Lack of Exchangeability (Amendments to IAS 21)
- Classification and Measurement of Financial Instruments (Amentments to IFRS 9 and IFRS 17)
Consolidated Financial Statements of Icelandair Group hf. 2024 50
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 2024, 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), the country’s national
body for quality management and performance improvement, is the coordinator of the recognition process.
In all main respects there are detailed rules of procedure in place, including for the Nomination Committee. However, a
specific diversity policy has not been implemented in relation to the combination of the members of the Board of Directors.
In its work, the Nomination Committee gives consideration to 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 40% at year-end 2024.
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 and report on them to the Board.
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.
Health &
Board of Audit Remuneration Nomination Safety
Directors Committee Committee Committee Committee
10 4 3 4 6
x (Chairm.) x (Chairm.)
x x x
x x
x x x (Chairm.)
x x
x
x (Chairm.)
x (Chairm.)
x
Nr. of meetings in 2024 .........................
Guðmundur Hafsteinsson ......................
Nina Jonsson .........................................
Svafa Grönfeldt ......................................
John F. Thomas .....................................
Matthew Evans ......................................
Alda Sigurðardóttir .................................
Alexander Eðvardsson ...........................
Árni Gunnarsson ....................................
Georg Lúðvíksson ..................................
Corporate Governance Statement, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 51
Internal controls, contd.:
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 2024.
Audit Committee members:
Alexander Edvardsson, 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 and members of the Board. 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.
Corporate Governance Statement, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 52
Remuneration Committee, contd.:
At the Company's Annual General Meeting in 2022 it was approved to implement a share-based incentive program for the
senior leadership team and other selected key employees. In 2024, 385,300,000 stock options were granted based on the
program, thereof 111,000,000 to the Executive Committee.
General Salary Development
The international airline and aviation industry is very regulated and highly unionized and Icelandair's operations are no
exception therefrom. This operational set-up means that typically about half of the workforce's terms and conditions of
employment – corrected for seasonality – is governed by collective wage agreements with the other half operating under
general market developments.
Icelandair's operations span 24/7 all year round on top of substantial seasonality. The hub and spoke model further means
that full efficiency in the deployment of staff is a challenge. All of this has implications for the setup and development of
wage agreements of ground operation and office staff.
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 take into account 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, taking into account 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 2024.
Remuneration Committee members:
Gudmundur 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
election to the Board of Directors is on the agenda.
The Nomination Committee shall put forward its rationalized opinion concurrently to 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 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 four meetings in 2024. During the year, changes were
made on the Nomination Committee as Hjorleifur Palsson, Helga Arnadottir and Ulfar Steindorsson left and three new
members were appointed.
Corporate Governance Statement, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 53
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 was formed to foster closer involvement from the Board of Directors with Icelandair's
Health & Safety policies. The 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 six meetings in
2024.
Health & Safety Committee members:
John F. Thomas, Chairman
Nina Jonsson
The Board of Directors
At the Annual General Meeting of Icelandair Group, held on 7 March 2024, 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.
Further information.
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. Further information.
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. Further information.
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. Further information.
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.
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 at all times
in correct and proper order.
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.
Corporate Governance Statement, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 54
The Board of Directors, contd.:
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 Deputy 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 had an opportunity to discuss the
matter, if possible. The outcome of issues is decided by force of vote, and in the event of equalvotes, 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 ten 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 2024 with the exception of Matthew Evans who
represents the largest shareholder.
Executive committee
Bogi Nils Bogason, President & CEO
Bogi holds 23,625,000 shares and 44,200,000 share options and has no interests linked with the Company’s main clients,
competitors, or major shareholders. The seven members of the Executive Committee hold a total of 170,600,000 share
options.
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
Rakel Óttarsdottir, Chief Digital Officer
Sylvía Kristín Ólafsdóttir, Chief Operating Officer
Tomas Ingason, Chief Commercial Officer
The Executive Committee held 88 meetings in 2024. Further information on the Executive Committee members can be
found on the Icelandair Group website.
Consolidated Financial Statements of Icelandair Group hf. 2024 55
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 2024. The statement includes information about the potential impacts that Icelandair’s
operations and value chain have on the environment and society, as well as the potential financial effects of the
environment and society on Icelandair’s operations. Furthermore, the statement includes information on how Icelandair
works on managing these impacts.
The scope of the sustainability statement is the same as for the financial accounts and no subsidiaries are exempt from
the statement.
To prepare for the EU Corporate Sustainability Reporting Directive (CSRD), which is expected to be implemented in Iceland
in 2025, 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.
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.
Business model, value chain and strategy
Business Model
The heart of the Icelandair business model is its international route network built on the unique location of Iceland which
serves as a connecting hub between Europe and North America. This unique route network creates a competitive
advantage for Icelandair and drives value creation for its shareholders and other stakeholders. Within its route network,
Icelandair serves four distinct markets: to, from, via and within Iceland. In addition, the Company runs both cargo and
aircraft leasing and consulting services that complement and further strengthen its core network operations. Icelandair
serves a diverse group of customers, both within the leisure and business segments, across its route network, cargo and
leasing operations.
Icelandair has employees located in three different regions:
Value chain
Icelandair's value chain reflects a comprehensive network of upstream suppliers and downstream partners working
together to deliver seamless transportation services and generate value for stakeholders. The upstream value chain
includes suppliers of critical inputs such as aircraft, fuel, maintenance and airport facilities. These inputs along with
Icelandair’s business model enable the delivery of core outputs. The downstream activities focus on passenger and cargo
transportation from the airport, as well as community contributions. 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.
North America 30 0.9%
Europe not including Iceland 101 2.8%
Iceland 3,444 96.3%
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 56
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 – which is a reminder to continually strengthen the Company's value
proposition and improve customer experience
• Agile and financially sustainable business – which highlights the value of operating in a nimble manner while
being financially responsible
• Embracing our people and the planet – which underlines that all decisions should be made with full consideration
given to the Company's responsibilities towards its people, the wider community, and the environment
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 2024, 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
• Raise On-Time Performance (OTP) in a sustainable and safe way
• Improve competitiveness through cost-optimization
ESG Strategy
Icelandair is currently updating its ESG strategy that is rooted in the values of Icelandair and designed to guide how the
Company embraces people and the planet, which is one of the guiding principles of its corporate strategy. It is built on the
Company’s previous sustainability strategy and takes into account the recently conducted Double Materiality Assessment,
which has helped sharpen the Company’s sustainability priorities. The ESG strategy is divided into Environment, Society
and Governance where three focus areas have been identified for each. The following nine sustainability focus areas are
supported by targets and metrics to track progress, which will be published in 2025.
• Environment
o Climate Action
o Resource use and waste
o Environmental performance
• Society
o Economic prosperity
o Culture of equality, diversity, inclusion and belonging
o Safety and well-being of all
• Governance
o Ethical conduct
o Responsible procurement practices
o Holistic decision making
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 57
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.
A new sustainability governance structure was established during the year for overseeing and managing material impacts,
risks and opportunities related to the environment, society and governance. 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. The Executive Committee is
expected to ensure that available resources are in place and monitor the implementation of CSRD. The project owner
within the Sustainability Team is responsible for keeping the Executive Committee updated on the CSRD implementation,
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, a designated contact person in each department is responsible for handling requests
from the Sustainability Team.
During 2024, the Board of Directors and the Executive Committee discussed a broad range of sustainability matters,
including sustainability reporting, the CSRD implementation plan, the sustainability governance structure, the development
of an updated ESG Strategy, the decarbonization roadmap, regulatory developments and the commitment to setting a
science-based climate target through the Science Based Target Initiative (SBTi).
Statement on due diligence
I celandair recognizes its responsibility to uphold and promote responsible business practices, including due diligence
processes. Icelandair has taken the first steps to embed due diligence principles into corporate policies and the Company’s
Supplier Code of Conduct, in line with the OECD Guidelines for Multinational Enterprises on Responsible Business
Conduct and UN Guiding Principles on Business and Human Rights. Utilizing a double materiality assessment, Icelandair
has continued to identify human rights and environmental impacts within the operations and throughout the activities of
business partners across the value chain. Moving forward, Icelandair aims to enhance its due diligence processes,
integrating them into the operations and actively addressing the mitigation and prevention of identified impacts.
Icelandair’s corporate policies are available on the public website and the Company’s intranet. The policies apply to the
entire Icelandair workforce at all levels and grades, all operations and subsidiaries. Icelandair is in the process of updating
its policies to reflect its sustainability priorities as outlined in the ESG Strategy, the results of the Double Materiality
Assessment and the requirements of the ESRS. These will be implemented in 2025.
Material sustainability matters
The concept of double materiality is presented with the new 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. To prepare for the upcoming regulation in
Iceland, Icelandair performed a Double Materiality Assessment in the latter part of 2023.
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 followed:
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
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 58
Description of the process to identify and assess material impacts, risks and opportunities, contd.:
"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. Icelandair is in the process of integrating sustainability risks into the Risk
Registry, and all identified risks, including sustainability-related ones, are accessible within the risk management system.
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.
In 2024, Icelandair conducted a gap assessment to identify the documentation and data needed to comply with the
disclosure requirements. The process began by identifying the material disclosure requirements and data points based on
the results of the double materiality assessment. Subsequently, the data availability for material datapoints was assessed.
It includes reviewing currently available data, assessing its quality and reliability, starting to collect new types of data,
developing policies and implementing new processes to prepare for disclosing in accordance with CSRD when it comes
into effect in Iceland.
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 ESG strategy and the Company’s approach to sustainability.
Over the coming years, Icelandair plans to conduct deeper analyses of impacts and risks, integrating them into its overall
risk management processes. The Double Materiality Assessment will be reviewed bi-annually unless any significant
changes occur in the Company’s management system or business model.
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 Not Material
Affected communities Material Not Material
Consumers and end users Material Not Material
Business Conduct Material Material
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 59
Environment
Introduction
The following chapter includes information on processes and performance related to the material topics of climate, pollution
and resource use and circularity, as well as reporting on the EU Taxonomy. Oversight over the different material topics is
managed within 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.
As part of the Company’s efforts to address its environmental impact, both globally and locally, Icelandair participates in
the work of various environmental working groups, within organizations such as IATA and Airlines for Europe (A4E).
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 with regard to the six environmental objectives that have been
established. The environmental objectives are: 1) climate change mitigation, 2) climate change adaptation, 3) the
sustainable use and protection of water and marine resources, 4) the transition to a circular economy, 5) pollution
prevention and control, and 6) the protection and restoration of biodiversity and ecosystems.
Icelandair’s Taxonomy-eligible activities
An eligibility screening and interpretation of the criteria was done in the fall of 2023 to determine whether Icelandair’s
business activities were eligible under the EU Taxonomy. According to the screening, 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 2024. The Company
will continue to 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 0.2% of Icelandair’s overall turnover. The
expenditure of USD 32 million accounts for 26.9% of the capital expenditure for the reporting year. The economic activity
accounts for USD 122 million and 8.5% of Icelandair’s total OpEx 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 94 million represents 6.2% of Icelandair’s overall turnover. The expenditure of USD
16 million accounts for 13.8% of the capital expenditure for the reporting year. The economic activity accounts for USD 63
million and 4.4% of Icelandair’s total OpEx expenses.
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 60
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 1,452 million represents 92.2% of Icelandair’s overall turnover. The expenditure of
USD 66 million accounts for 55.6% of the capital expenditure for the reporting year. The economic activity accounts for
USD 1,103 million and 77.1% of Icelandair’s total OpEx 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 9 million represents 0.6% 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 4 million accounts for 3.7% of the capital expenditure for the reporting year. The economic activity accounts for USD
143 million and 10% of Icelandair’s total OpEx 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. 2024 61
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities for year 2024.
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)
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 9 0.6% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Leasing of aircraft 6.18 94 6.2% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Manufacturing of aircraft 3.21 2 0.2% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Passenger and freight air transport 6.19 1,452 92.2% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
1,557 99.2% _ _ _
1,557 99.2% _ _ _
13 0.9%
1,571 100%
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
Turnover of Taxonomy-non-eligible activities
Total (A+B)
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. 2024 62
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities for year 2024.
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 4 3.7% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Leasing of aircraft 6.18 16 13.8% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Manufacturing of aircraft 3.21 32 26.9% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Passenger and freight air transport 6.19 66 55.6% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
118 100% _ _ _
118 100% _ _ _
0.00 0%
118 100%
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
Capex of Taxonomy-non-eligible activities
Total (A+B)
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. 2024 63
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities for year 2024.
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) 143 10.0% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Leasing of aircraft (OpEx A) 63 4.4% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Manufacturing of aircraft (OpEx A) 122 8.5% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
Passenger and freight air transport (OpEx A) 1,103 77.1% EL N/EL N/EL N/EL N/EL N/EL 0%
_ _
1,431 100% _ _ _
1,431 100% _ _ _
0.00 0%
1,431 100%
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
OpEx of Taxonomy-non-eligible activities
Total (A+B)
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. 2024 64
Climate change
Materiality
Climate action remains one of Icelandair’s main sustainability focus areas due to the climate impacts of air travel.
Icelandair's own operation, specifically flights and ground handling activities generate greenhouse gas (GHG) emissions.
The aviation industry is a contributor to GHG emissions, mainly through the combustion of aviation fuels. The industry has
pledged to achieve net-zero carbon emissions by 2050. Technological advancements in aviation throughout the years have
led to new-generation aircraft that deliver 20% to 30% lower emissions than older generation aircraft. However, the
industry’s transition to alternative fuel sources has been challenging. Scaling up and financing the production of Sustainable
Aviation Fuels (SAF) remains critical to achieving climate goals. Beyond flights, GHG emissions are also generated in
ground handling activities. Additionally, GHG emissions occur across the value chain, from production of aircraft, fuels,
transport of passengers to and from airports, and in waste handling.
Policies related to climate change
Icelandair is currently updating its Climate and Environmental policy, which addresses reducing greenhouse gas emissions
through fleet renewal, operational improvements, and exploring the use of alternative fuels. It also addresses the mitigation
of climate risks to ensure the resilience of the operations against the impacts of a changing climate.
Target
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.
The table below shows the progress made in the reduction of carbon emissions intensity 2019-2024.
As part of the Company’s commitment to a more sustainable aviation future, a decarbonization strategy has been
developed that focuses on the most impactful and manageable levers available today. At the core of this strategy are fleet
renewal and operational improvements, which will drive the reductions in carbon emissions over the short to medium term.
Simultaneously, the Company is exploring the use of Sustainable Aviation Fuels, which will increasingly support the climate
targets in the mid- and long-term.
During 2024, Icelandair decided to set climate targets in line with the Science Based Targets initiative (SBTi). Icelandair
has now formally committed to setting a near-term company-wide emission reductions target in line with climate science
with the SBTi. Following this commitment, Icelandair will in 2025 and 2026 work on developing targets aligned with the
SBTi criteria.
Actions related to climate change policies
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
The most effective and immediate way to reduce carbon emissions is by modernizing the fleet. Replacing older models
with new generation aircraft that are far more fuel efficient has a significant impact on reducing fuel consumption, emissions
and decreasing operational costs. During 2024, three Boeing 757s were retired and one Boeing 767 was subleased to
another airline. Icelandair took delivery of three new Boeing 737MAX during the year, as well as its first ever Airbus aircraft,
an A321LR. These aircraft are of a new generation of more fuel-efficient and thereby more environmentally friendly aircraft,
and therefore an important part of reducing carbon emissions within the operation.
2019 2024 Status % 2030 target
tCO2e/OTK 0.895 0.73 -18% 0.448
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 65
Operational improvements
While fleet renewal is a critical lever to reduce carbon emissions the full potential of decarbonization efforts will only be
realized when combined with operational improvements that optimize fuel efficiency across every aspect of the operations.
The Company’s fuel efficiency program is the tool to achieve optimal fuel efficiency and involves a collaborative effort and
best practices that involve various departments within the Company, each playing a crucial role in achieving operational
excellence. During 2024, various projects were realized such as the optimization of potable water, active monitoring of
pantry weight and customization of serviceable on-board items to reduce weight. 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. 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.
As part of Icelandair’s climate efforts, the Company also wants to help its customers better understand the carbon footprint
of their flights and give them an opportunity to support climate solutions. In 2024, Icelandair partnered with CHOOOSE to
give travelers access to a climate software solution which can help them understand, calculate and address their travel
emissions. The service is available at point of booking and offers passengers a way to address their travel-related carbon
emissions by supporting accredited climate solutions around the world.
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.
.
Energy consumption and mix (MWh)
2024
Total energy consumption from fossil sources 4,707
Fuel consumption from coal and coal products 0
Fuel consumption from crude oil and petroleum products; 4,707
Fuel consumption from natural gas; 0
Fuel consumption from other fossil sources; 0
Consumption of purchased or acquired electricity, heat, steam,
or cooling from fossil sources;
Share of fossil sources in total energy consumption (%) 99.5%
Total energy consumption from renewable sources 21
Fuel consumption from renewable sources including biomass (also comprising
industrial and municipal waste of biologic origin), biofuels, biogas, hydrogen
from renewable sources, etc
Consumption of purchased or acquired electricity, heat, steam, and cooling
from renewable sources
Consumption of self-generated non-fuel renewable energy 0
Share of renewable sources in total energy consumption (%) 0.5%
Total energy consumption 4,728
0
0
21
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 66
Climate and energy related metrics, contd.:
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 expand on different categories in 2025.
Potential financial effects from material transition and physical risks
Icelandair is subject to various regulations related to the EU Green Deal and “Fit for 55” and has physical assets and
operations dependent on weather conditions. Hence, climate-related transition and physical risks have been identified as
material.
Transition risk
In 2023 The Regulation (EU) 2023/2405 of the European Parliament and of the Council of 18 October 2023 on ensuring a
level playing field for sustainable air transport (“ReFuelEU”), was adopted in the European Parliament with the aim to
increase the uptake of sustainable fuels in the aviation sector. It came into effect on 1 January 2024 to ensure that, starting
from 2025, at least 2% of aviation fuels will be sustainable, with this share increasing every five years: 6% in 2030, 20% in
2035, 34% in 2040, 42% in 2045 and 70% in 2050. However, Sustainable Aviation Fuels (SAF) remain difficult to source
and the availability and price may challenge Icelandair’s climate transition.
Airlines have been part of the EU’s Emissions Trading System (ETS) since 2012. Since the beginning, the total number of
emissions allowances in the system has been steadily reduced. In 2023, changes were introduced to ensure a further
reduction in emissions and the changes were implemented into Icelandic law by year-end. These changes include a faster
reduction in allowances and more aggressive phase-out of free allowances for airlines from 2024 to 2026, despite aviation
not having any other technical means of reducing its emissions. These new rules disproportionately affect Icelandair and
Iceland as a tourist destination due to Iceland's geographical location on the periphery of Europe and dependence on air
travel. Unlike other European countries, Iceland has no alternative means of international travel and its stage length to
Europe results in higher proportional costs for airlines connecting through Iceland compared to carriers operating
elsewhere, or flying directly across the ocean. This would make flights more expensive for Icelandic operators than their
EEA and non-EEA peers and could lead to carbon leakage. The Icelandic government, therefore, negotiated a special
adoption and reached an agreement with the EU Commission to adapt Directive (EU) 2023/958 for Iceland. In 2024, the
Icelandic government worked on the accompanying regulations to define how to reimburse airlines flying to and from
Iceland 100% of the price difference between SAF and fossil fuel at Icelandic airports, in addition to defining the carbon
neutrality plan that airlines will need to submit to the Environmental Agency to retain free emission allowances in 2025 and
2026. However, uncertainty remains on how this will be implemented and the effects on Icelandair.
Physical risk
Icelandair is inherently exposed to physical climate risks, such as changing weather patterns, rising sea levels and extreme
temperatures due to its dependence on weather conditions. Such events can pose a challenge to the operations such as
infrastructure stability and flight operations. Recognizing the importance of proactively addressing these challenges,
Icelandair plans to conduct a climate risk assessment in 2025. This initiative aims to identify and evaluate our primary
physical climate risks, enabling us to develop strategies to mitigate their impacts and enhance the resilience of our
operations.
For further information see the Operational risk chapter.
GHG emissions
Scope 1 GHG emissions Units
2024
Gross Scope 1 GHG emissions tCO2e 1,167,660
Percentage of Scope 1 GHG emissions from regulated
emission trading schemes
Scope 2 GHG emissions
Gross location-based Scope 2 GHG emissions tCO2e 168
Gross market-based Scope 2 GHG emissions tCO2e 0
Significant Scope 3 GHG emissions
Total Gross indirect Scope 3 GHG emissions (Waste generated in operations) tCO2e 89
Total GHG emissions 1,167,917
%
41%
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 67
Pollution
Materiality
The primary source of pollution is the burning of aviation fuel. Pollution also arises throughout the value chain from activities
such as production processes, airport transport, staff and cargo transportation, catering services, ground vehicle
operations, ground support at airports, fuel storage and paint stripping. Noise pollution, while not included as a sub-topic
under the ESRS, is also a material concern for Icelandair. Aircraft noise can impact communities and habitats around
airports, particularly due to the noise generated during takeoff and landing. Additionally, Icelandair uses substances of
concern in its operations.
Policies related to pollution
While updating its Climate and Environmental Policy, Icelandair is updating its commitment to mitigate the negative impacts
of air and noise pollution. The Company follows standard operating procedures in relation to noise abatement to minimize
the impact on surrounding communities. Moreover, Icelandair works to minimize and phasing out substances of very high
concern, and proactively prevent incidents and emergency situations, and ensure that, if they do occur, their impact on
people and the environment is controlled and minimized. All incidents are reported and managed through the Company’s
Safety Management System (SMS).
Actions related to pollution
The commitment to mitigate the negative impacts of air and noise pollution is reflected in the Company’s climate actions,
such as renewing the fleet to newer generation aircraft, implementing operational improvements and exploring the use of
alternative fuels – all of which contribute to mitigating air and noise pollution. Air and noise pollution are some 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.
In the technical operation and maintenance processes, certain substances of concern, including hazardous chemicals and
other regulated pollutants, are utilized. To ensure safe handling and compliance, Material Safety Data Sheets (MSDS) are
available for such materials, describing the properties and potential hazards of the material, how to use it safely, and what
to do in an emergency. In 2025, Icelandair’s goal is to identify all substances of concern used in the operations and continue
phasing out substances where possible. In terms of de-icing practices, standard operating procedures are in place. The
de-icing procedures ensure compliance with the relevant regulations, and global aircraft de-icing standards, to ensure
optimal aerodynamic performance and safety.
Targets
Air and noise pollution from Icelandair’s operations are closely linked to the Company’s GHG emissions. Consequently,
the climate targets are expected to address and mitigate these pollution impacts. As a result, Icelandair has not established
specific targets for air and 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.
Icelandair is starting to monitor pollution and therefore does not have metrics available for 2024.
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 68
Resource use and circularity
Materiality
Resource inflows and outflows are assessed as 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 to a large extent 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.
Policies related to resource use and circularity
Through Icelandair’s Environmental Policy, the Company is committed to decreasing waste, maximizing recycling and
finding circular solutions. While updating its policy, Icelandair is updating its commitment to reducing waste and promoting
the responsible use of resources, specifically aiming to reduce single-use plastics, eliminate non-essential consumables
in the cabin, and adopt responsible procurement practices to minimize negative impacts across the supply chain.
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 avoid unnecessary over catering. The Company has also
prioritized sustainable materials and reducing waste, such as introducing new blankets made from recycled materials, and
actively working to eliminate single-use plastics and consumables onboard. For example, Saga membership cards are
now exclusively digital, plastic cups are no longer provided with every drink and newspapers are no longer offered – all
contributing to reducing cabin waste.
Targets
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 recently all been incinerated due to
these regulations. In good cooperation with the Environment Agency of Iceland and the Icelandic Food and Veterinary
Agency, new guidelines were implemented in 2023 that enable airlines to sort clean recyclables, i.e., plastic, paper and
aluminum cans coming into Iceland.
Icelandair has set goals related to efficient material use in line with the Company’s policy commitments. The goals aim to
achieve a 40% recycling rate for aircraft waste in 2025 and to implement measures to report on waste reduction per
passenger. The goals focus on the upper levels of the waste hierarchy, emphasizing waste prevention and recycling to
minimize the amount of waste sent to landfills and reduce environmental impact.
Waste related metrics
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 the Keflavik hub amounted to 808 tons, a reduction
from 1,338 tons in 2023. This reduction is due to changes that were made during the year as Icelandair outsourced its
catering facilities to an international catering company. The on-board waste stream is processed through the catering
facilities in Keflavik and are therefore no longer a part of Icelandair’s total waste. The largest waste stream aside from the
on-board waste is mixed waste from the on-board service, containing mainly food waste and packaging waste. Food and
beverage waste from international flights has to be incinerated or sent to landfill due to international catering regulation.
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 69
Waste related metrics, contd.:
The waste target for 2024 was to recycle at least 40% of on-board waste, a goal that was not achieved due to the transition-
phase to changed processes. Approximately 20% of on-board waste was recycled during the year, however, in December
the recycled waste was over 40%, so the process is getting back on track. The amount of waste generated is relative to
the number of flights flown and passengers transported.
Financial risks
Resource inflows have been assessed as financially material for Icelandair in the long term, as Icelandair is dependent on
specific resources for its operations. Icelandair faces potential risks associated with supply chain disruption and resource
scarcity, as some materials critical to airline operations include critical raw materials. While the financial effects are
expected to be moderate, quantification of the effects is challenging. 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.
Social
Introduction
Icelandair respects human rights and requires all its employees to treat others with trust, dignity, respect, fairness and
equity. Icelandair recognizes the growing focus on human rights due diligence, driven by legislation like the EU Taxonomy's
Minimum Safeguards, the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability
Reporting Directive (CSRD), as well as increased inquiries from business partners. In response, Icelandair has taken the
first steps of developing sustainability due diligence processes, which will including human rights due diligence, to
demonstrate responsible practices and meet expectations.
Own workforce
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. Adequate housing has also been assessed as material as Icelandair
provides housing for certain foreign workers in Iceland.
Waste
kg
Total amount of waste generated 808,376
Total amount of waste diverted from disposal 639,875
Non-hazardous 639,875
Preperation for reuse 0
Recycling 297,317
Other recovery operations 342,558
Hazardous
0
Preperation for reuse 0
Recycling 0
Other recovery operations 0
Total amount of waste directed to disposal 168,501
Non-hazardous 164,553
Incineration 2,759
Landfill 161,794
Other disposal operation 0
Hazardous 3,948
Incineration 3,948
Landfill 0
Other disposal operation 0
Total amount of non recycled waste
168,501
Percentage of non recycled waste 21%
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 70
Materiality, contd.:
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, and 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.
Policies related to own workforce and processes for engaging with own workers about impacts and raising
concerns
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. 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.
Icelandair is currently developing and will in 2025 implement 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, which includes a commitment to respect the human rights of employees, workers in the value chain, affected
communities and customers.
Icelandair is committed to fostering an inclusive, equitable environment that celebrates diversity, promotes equality and
accessibility, and nurtures a sense of belonging for all. To support the commitment 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 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 Icelandair collaborates with
stakeholders to resolve issues, communicates actions taken and incorporates lessons learned to prevent future
occurrences.
Action related to own workforce
In the end of 2024, Icelandair relocated its headquarters to the new Icelandair House in Hafnarfjördur. 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. With improved lighting, noise control and
air quality, the headquarters offer a modern and diverse work environment that supports the Company’s ambition to be
Iceland’s most desirable employer.
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 71
Action related to own workforce, contd.:
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. To support this vision, the People & Culture team ensures that all
employees have access to market-leading learning and development resources tailored to their diverse needs. At the same
time, 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.
Every month, the People & Culture team curates an ambitious training schedule featuring both on-site and online courses.
Through the Company’s extensive e-learning platform, employees can access a wide range of courses designed to support
their personal and professional growth.
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 training department with upgraded programs which are adapted to classrooms, practical facilities and electronic
learning alike for both pilots and cabin crew. The introduction of new Airbus A321 aircraft is a huge task, and during 2025
the training facilities will be upgraded to meet the highest standards in training. This includes a CEET Airbus Cabin
Emergency Evacuation Trainer and a full flight 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.
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 the 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.
Targets
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 40. 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
Icelandair has a diverse workforce with employees representing many different skills, both personal and professional and
they represent 35 different nationalities. The metrics presented on the characteristics of Icelandair’s workforce only include
employees in Iceland, as Icelandair does not have at least 50 employees representing at least 10% of its employees in
other countries than Iceland. No employee has requested to not disclose its gender or to identify as other gender than
female or male.
Total number of employees (FTE) in 2024 on average was 3,575, which is a reduction of 1.7% from 2023.
Numbers of
employees
Gender (head count)
Male
1,990
Female
1,930
Total employees
3,920
2024
Male Female Total
Number of employees (FTE) 1,911 1,664 3,575
Number of permanent employees (FTE) 1,810 1,473 3,283
Number of temporary employees 92 172 263
Number of non-guaranteed hours employees 8 20 28
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 72
Employee related metrics, contd.:
The employee turnover includes voluntary leave, dismissal, retirement and death in service. The turnover rate at Icelandair
remains quite low at 7% rising from 4% in 2023.
The percentage of employees covered by workers’ representatives in Iceland is 99%.
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.
The employee age distribution at Icelandair is quite normal with a normal distribution of younger and older employees.
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
management system.
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 of average pay levels between female and male employees,
expressed as percentage of the average pay level of male employees. The remuneration ratio is defined as the annual
total remuneration ratio of the highest paid individual to the median annual total remuneration for all employees (excluding
the highest-paid individual).
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.
2024
Number of employees who left during the reporting period 253
Employee turnover 7%
Gender distribution at top management
2024 2023
Male
60% 60%
Female
40% 40%
Employee distribution by age
2024
Under 30 years old
19%
30-50 years old
55%
Over 50 years old
26%
Health and satety
2024
Number of fatalities as a result of work-related injuries and work-related ill health 0
Number of recordable work-related accidents 254
Cases of recordable work-related ill health
0
Number of days lost to work-related injuries from work related accidents or ill health 1420
Remuneration and pay gap 2024
Gender pay gap
1:1.28
Remuneration ratio 8
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 73
Employee related metrics, contd.:
Value chain workers
Materiality
The sustainability of the supply chain is an important aspect of the Company’s operations. As part of its efforts to enhance
sustainability due diligence, Icelandair plans to conduct a human rights risk assessment to gain a better understanding of
the human rights risks throughout the value chain.
Policies and processes related to value chain workers
Icelandair has a Supplier Code of Conduct in place where suppliers are required to ensure that materials are ethically
sources, 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 with in its own operations. Icelandair
is updating its procurement practices, including risk assessing and monitoring suppliers in a systematic way.
Affected communities
Materiality
Icelandair contributes to economic prosperity in Iceland as a leading tourism company, as one of the largest employers in
the country and through its community engagement. Icelandair contributes directly to the Icelandic economy in the form of
salaries, salary-related expenses and pension contributions, in addition to its indirect contribution that drives economic
benefits not only to the local tourism industry but the Icelandic economy as a whole. By connecting Iceland to the world,
Icelandair also facilitates international relations and trade by connecting Iceland to the world and by supporting important
export and import through its cargo operations. While not specifically included as a sub-topic under the ESRS, Icelandair
regards this impact as material.
Actions on material impacts on affected communities
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. Icelandair supports Icelandic
music through Iceland Airwaves and Icelandic Music Experiments. The Company has also been a proud sponsor of the
main sports federations in Iceland for years. 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 helps families of children
with long-term illnesses and children who live in difficult circumstances.
Human rights incidents
2024
Total number of incidents of discrimination, including harassment 31
Number of complaints filed through channels for employees to raise concerns 13
The total amount of fines, penalties, and compensation for damages as a result of
the incidents and complaints
Number of severe human rights incidents 0
The total amount of fines, penalties and compensation for damages as a result of severe
human rights incidents
0
0
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 74
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 2024 amounted to USD 274 million.
Consumers and end users
Materiality
Icelandair’s primary sustainability impact on customers relates to personal safety and social inclusion. The health, safety
and security of passengers is always the Company’s highest priority, with ongoing measures to identify and manage risks
and consistently improve its Safety Management System. The protection of children is a key area of focus, supported by
procedures designed to enhance their travel experience and provide special services to unaccompanied minors. Non-
discrimination has been identified as a material topic, recognizing that aspects of the services provided may limit access
for some individuals.
Policies and processes related to customers
Icelandair is committed to providing an accessible and inclusive travel experience for all passengers. 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.
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.
Total tax footprint of Icelandair Group in USD thousand
Other Other
Iceland Countries Total Iceland Countries Total
Salary-related taxes ................................
24,249 486 24,735 21,080 417 21,497
Pension fund contribution ........................
51,267 20 51,287 47,599 1,282 48,881
Emission charges .................................... 0 21,336 21,336 0 23,272 23,272
Landing fees ............................................ 22,103 32,989 55,091 14,596 32,169 46,765
Other taxes .............................................. 4,784 0 4,784 4,346 0 4,346
Companies fees 102,403 54,831 157,234 87,621 57,139 144,761
Employee income taxes .......................... 115,008 433 115,441 100,180 336 100,517
Passenger taxes ..................................... 53,107 127,898 181,004 41,818 107,006 148,824
Collected taxes 168,115 128,331 296,445 141,998 107,342 249,341
Deferred payments on payroll taxes ........ 3,896 0 3,896 6,535 0 6,535
Total tax footprint 274,414 183,162 457,576 236,154 164,481 400,637
2023
2024
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 75
Actions related to material impacts on customers
A robust customer experience strategy has been established with the aim of refining Icelandair’s services and elevating
the quality of its offerings. Icelandair has prioritized accessibility and stakeholder engagement throughout the year. In 2024,
the Company’s comprehensive customer service questionnaire was updated with a specific focus on how to communicate
with and support passengers with disabilities, including both visible and non-visible disabilities. The goal is to ensure
respectful interactions and create a less stressful, more enjoyable experience for this group. Icelandair has also identified
key stakeholder groups related to passengers with disabilities and, in collaboration with the Icelandic Disability Alliance
(Öryrkjabandalag Íslands), produced an informational video to help passengers with disabilities better understand the
journey and the service offered.
Targets
Icelandair’s commitment is to provide smooth, enjoyable and safe journeys, tailoring its diverse group of customers.
Performance is measured using metrics such as Net Promoter Score (NPS), Customer Satisfaction (CSAT) scores, and
customer feedback scores, which provide valuable insights for ongoing improvement.
Governance and business conduct
Introduction
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.
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 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. The Company
will continue to monitor the implementation of the new European Corporate Sustainability Due Diligence Directive (CSDDD)
for reference. More emphasis will be put on qualifying and monitoring suppliers in a systematic way, with self-assessments
and risk evaluations.
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.
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. 2024 76
Metrics related to business conduct
In 2024, there were no convictions for violations of anti-corruption and anti-bribery laws.
Icelandair’s Procurement policy outlines payment practices, specifying payment terms of 30 days. Standards payment
terms are 7 days for fuel suppliers and 30 days for all other supplier categories. While Icelandair has data available for
2023, efforts are underway to refine calculations, enabling detailed reporting of payment practices for the financial year
2025 in next year’s accounts. As of 2024, there were no outstanding legal proceedings related to late payments.
ESG Accounting
Environmental Metrics
E1 GhG Emissions Units
2024 2023
Total amount, in CO2 equivalents, for Scope 1 tCO2e 1,167,660 1,114,297
Total amount, in CO2 equivalents, for Scope 2 tCO2e 168 243
Total amount, in CO2 equivalents, for Scope 3 tCO2e 89 114
E2 Emissions Intensity
Total GhG emission per output scaling factor tCO2e per FTEs 327 306
tCO2e per
passenger
0.25 0.26
Total CO2 emissions per scaling factor CO2 per OTK 0.73 0.76
E3 Energy Usage
Total amount of energy directly consumed (fossil fuels) GWh 4,707 4,532
Total amount of energy indirectly consumed (electricity and heat)
GWh 21 26
E4 Energy Intensity
Total direct energy usage per output scaling factor GWh per FTEs 1.32 1.25
GWh per
passenger
0.001 0.001
E5 Energy Mix
Non renewable energy (fossil fuels are the primary energy source)
% 99.5% 99.4%
Renewable energy % 0.5% 0.6%
E6 Water Usage
Total amount of water consumed m3 302,770 376,458
Total amount of water reclaimed m3 - -
E7 Environmental Operations
Does your company follow a formal Environmental Policy Yes/No Yes Yes
Yes/No Yes Yes
Yes/No Yes Yes
Does your company follow specific waste, water, energy, and/or
recycling policies
Does your company use a recognized energy management
system
E8 Climate Oversight / Board
Yes/No No No
E9 Climate Oversight / Management
Yes/No Yes Yes
E10 Climate Risk Mitigation
ISK - -
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
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 77
Social data metrics
S1 CEO Pay ratio Units
2024 2023
ratio 8 -
Yes/No Yes Yes
S2 Gender Pay Ratio
Gender pay analysis (regular earnings) %
2.4% in favor
of men
2.8% in favor
of men
CEO total compensation to median FTE total compensation
Does your company report this metric in regulatory filings
S3 Employee Turnover
Year-over-year change for full-time employees % 7% 4%
S4 Gender Diversity
Total enterprise headcount
held by men and women
women/men% 47/53 46/54
Entry- and mid- level positions held by men and women women/men% - -
women/men% 40/60 40/60
S5 Temporary Worker Ratio
women/men% - -
women/men% - -
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
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
S9 Child & Forced Labour
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
Non-Financial Reporting, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 78
Governance Metrics
G1 Board Diversity Units
2024 2023
% 40% 40%
% 0% 0%
G2 Board Independence
Yes/No Yes Yes
% 80% 80%
G3 Incentivized Pay
Yes/No No No
Total board seats occupied by women (as compared to men)
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
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
Total enterprise headcount covered by collective bargaining
agreements
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
Is sustainability data included in your regulatory filings
G9 Disclosure Practices
Yes/No Yes Yes
Yes/No Yes Yes
Yes/No Yes Yes
G10 External Assurance
Yes/No No No
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
Consolidated Financial Statements of Icelandair Group hf. 2024 79
Operational Risk
Overview
The Group considers the following to be its main operational risks as at year-end 2024:
- 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.
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 2024 with continued geopolitical unrest and relatively high inflation. 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.
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. 2023 saw a disproportionate increase in capacity to and from
Keflavík airport, Icelandair’s hub and home.
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 2024 which saw six eruptions and considerable damage to property. Although neither Keflavík airport nor the Company’s
flight schedule was affected by the events they nonetheless impacted the Company’s revenue generation in the first half
of the year.
The acute nature of such events 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. 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.
Operational Risk, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 80
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. 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. Icelandair Group is committed to implementing an emission mitigation scheme in line
with CORSIA. CORSIA will be implemented in stages and once fully reached Icelandair will be committed to neutralizing
all carbon emission beyond the emission of 2019, which has been chosen as the baseline year. 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.
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.
Operational Risk, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 81
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 are 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 are up for renewal in the second half of 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. 2024 82 Amounts are in USD thousands
Quarterly Statement
Unaudited summary of the Group's operating results by quarters:
Q1 Q2 Q3 Q4 Total
Year 2024
Operating income
183,960 330,178 466,431 255,219 1,235,788
14,902 23,005 30,027 21,361 89,295
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 5,057 21,336
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
Cargo revenue ...................................................
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 .............................................
Operating cost of real estate and fixtures ..........
Other Operating expenses .................................
Total Aircraft fuel cost ........................................
Aircraft and engine lease ...................................
Aircraft handling, landing and navigation ...........
Aircraft maintenance expenses .........................
Total Other aviation expenses ...........................
Other salary-related expenses ...........................
Total other operating income .........................
Total salaries and salary related expenses .......
Emission changes .............................................
Fuel hedges .......................................................
Gain on sale of operating assets .......................
Other operating revenue ....................................
Total Other operating revenue ...........................
Salaries ..............................................................
Contributions to pension funds ..........................
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 ........................................................
Quarterly Statement, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 83 Amounts are in USD thousands
Q1 Q2 Q3 Q4 Total
Year 2024, contd.:
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 )(
0 0 0 0 0
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)(
Net finance cost ...............................................
Other interest expenses .....................................
Net currency exchange (loss) gain ....................
Finance costs total .............................................
Other interest income ........................................
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 ................................
Interest income on lease receivables ................
Depreciation of operating assets .......................
Depreciation of right-of-use assets ....................
(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 .......
Income tax .........................................................
Operating (loss) profit (EBIT) ..........................
Share of loss of associates ................................
(Loss) profit before tax (EBT) .........................
Gain on sale of subsidiary .................................
Quarterly Statement, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 84 Amounts are in USD thousands
Unaudited summary of the Group's operating results by quarters:
Q1 Q2 Q3 Q4 Total
Year 2023
Operating income
156,339 330,123 478,684 238,917 1,204,063
14,201 22,605 29,360 19,698 85,864
170,540 352,728 508,044 258,615 1,289,927
23,691 22,020 20,951 21,599 88,261
19,083 19,456 13,708 19,070 71,317
12,392 10,128 7,514 9,390 39,424
1,493 1,774 2,542 1,524 7,333
1,191 1,957 2,545 1,358 7,051
125 373 73 130 701
4,740 5,744 4,980 4,091 19,555
19,941 19,976 17,654 16,493 74,064
233,255 414,180 560,357 315,777 1,523,569
Operating expenses
59,756 78,996 84,725 80,203 303,680
9,684 12,570 13,109 13,518 48,881
9,222 14,364 4,380 11,037 39,003
78,662 105,930 102,214 104,758 391,564
60,544 82,840 117,033 84,855 345,272
4,060 6,474 7,944 4,794 23,272
2,004 6,266 3,614 )( 1,879 )( 2,777
66,608 95,580 121,363 87,770 371,321
114 6,188 3,608 2,470 12,380
26,347 39,000 55,740 32,683 153,770
22,349 25,836 25,783 24,429 98,397
48,810 71,024 85,131 59,582 264,547
13,636 18,799 19,323 16,356 68,114
9,113 7,283 5,850 7,286 29,532
7,168 8,534 9,553 8,584 33,839
8,311 5,829 6,829 4,274 25,243
9,609 17,169 25,176 14,203 66,157
11,593 16,162 22,455 15,865 66,075
2,366 2,390 2,584 2,352 9,692
535 854 115 242 )( 1,262
8,930 9,026 11,711 10,092 39,759
71,261 86,046 103,596 78,770 339,673
265,341 358,580 412,304 330,880 1,367,105
32,086)( 55,600 148,053 15,103)( 156,464
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 .......................
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 ........................................................
Emission changes .............................................
Fuel hedges .......................................................
Total Aircraft fuel cost ........................................
Aircraft and engine lease ...................................
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 ......................................
Total Other Operating expenses ........................
Total operating expenses ...............................
Operating (loss) profit bef. depr. (EBITDA) ...
Quarterly Statement, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 85 Amounts are in USD thousands
Q1 Q2 Q3 Q4 Total
Year 2023, contd.:
18,164 22,393 22,537 21,571 84,665
11,278 12,247 13,375 13,453 50,353
97 106 126 130 459
29,539 34,746 36,038 35,154 135,477
61,625)( 20,854 112,015 50,257)( 20,987
3,847 3,055 6,262 10,245 23,409
50 42 32 101 225
851 517 1,180 1,126 3,674
1,590 438 )( 0 1,152 )( 0
6,338
3,176
7,474
10,320
27,308
4,278 )( 4,784 )( 4,985 )( 4,895 )( 18,942 )(
4,405 )( 4,968 )( 4,727 )( 4,615 )( 18,715 )(
597 )( 679 )( 844 )( 927 )( 3,047 )(
0 0 2,359 )( 2,101 258 )(
9,280 )(
10,431 )(
12,915 )(
8,336 )(
40,962 )(
2,942 )( 7,255 )( 5,441 )( 1,984 13,654 )(
0 1,381 0 0 1,381
535)(
361 370)( 381)( 925)(
65,102)( 15,341 106,204 48,654)( 7,789
15,970 1,685)( 21,740)( 10,835 3,380
49,132)( 13,656 84,464 37,819)( 11,169
2,072
997 10,942 10,533)( 3,478
47,060)( 14,653 95,406 48,352)( 14,647
154,414 129,001 41,441)( 26,853 )(
215,121
67,825 51,452)( 41,668)( 158,408 )(
183,703)(
37,296 25,660)( 30,019)( 38,237 )(
56,620)(
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
Net finance cost ...............................................
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 .............................................
Total comprehensive (loss) income ...............
Net cash from (used in) operating activities ......
Net cash from (used in) investing activities .......
Net cash from (used in) financing activities .......
Gain on sale of subsidiary .................................
Share of loss of associates ................................
(Loss) profit before tax (EBT) .........................
Income tax .........................................................
(Loss) profit for the period ..............................
Other comprehensive income (loss) ..............
Quarterly Statement, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 86 Amounts are in USD thousands
Unaudited summary of the Group's operating results by quarters:
2024 2023 2024 2023
Q4 2024 vs. Q4 2023 Q4 Q4 YTD YTD
Operating income
255,219 238,917 1,235,788 1,204,063
21,361 19,698 89,295 85,864
276,580 258,615 1,325,083 1,289,927
22,211 21,599 76,736 88,261
30,561 19,070 93,731 71,317
11,452 9,390 40,162 39,424
1,183 1,524 4,909 7,333
1,870 1,358 8,810 7,051
119 130 1,298 701
4,805 4,091 19,878 19,555
19,429 16,493 75,057 74,064
348,781 315,777 1,570,607 1,523,569
Operating expenses
81,435 80,203 321,352 303,680
12,465 13,518 51,287 48,881
9,001 11,037 33,391 39,003
102,901 104,758 406,030 391,564
65,253 84,855 330,411 345,272
5,057 4,794 21,336 23,272
4,241 1,879 )( 8,453 2,777
74,551 87,770 360,200 371,321
45 )( 2,470 4,492 12,380
37,371 32,683 165,402 153,770
31,367 24,429 122,246 98,397
68,693 59,582 292,140 264,547
16,580 16,356 71,662 68,114
9,094 7,286 30,725 29,532
9,222 8,584 35,961 33,839
5,893 4,274 24,103 25,243
14,332 14,203 68,848 66,157
24,433 15,865 89,228 66,075
2,564 2,352 9,544 9,692
254 242 )( 1,416 1,262
11,720 10,092 40,894 39,759
94,092 78,770 372,381 339,673
340,237 330,880 1,430,751 1,367,105
8,544 15,103)( 139,856 156,464
Aircraft and engine lease ........................................................
Aircraft handling, landing and navigation ................................
Revenue from tourism ............................................................
Sale at airport .........................................................................
Aircraft handling ......................................................................
Leasing revenue .....................................................................
Aircraft fuel .............................................................................
Emission changes ..................................................................
Fuel hedges ............................................................................
Total Aircraft fuel cost .............................................................
Passenger revenue ................................................................
Ancillary revenue ....................................................................
Other Operating expenses ......................................................
Aircraft maintenance expenses ..............................................
Total Other aviation expenses ................................................
Travel and other employee expenses .....................................
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) ........................
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 ...............................
Quarterly Statement, contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 87 Amounts are in USD thousands
2024 2023 2024 2023
Q4 Q4 YTD YTD
Q4 2024 vs. Q4 2023, contd.:
24,503 21,571 96,511 84,665
15,959 13,453 56,970 50,353
187 130 586 459
40,649 35,154 154,067 135,477
32,105)( 50,257)( 14,211)( 20,987
4,937 10,245 23,847 23,409
581 101 2,353 225
1,092 1,126 5,301 3,674
0 1,152 )( 0 0
6,610
10,320
31,501
27,308
3,502 )( 4,895 )( 15,484 )( 18,942 )(
5,979 )( 4,615 )( 22,435 )( 18,715 )(
768 )( 927 )( 3,142 )( 3,047 )(
408 )( 2,101 1,709 )( 258 )(
10,657 )(
8,336 )(
42,770 )(
40,962 )(
4,047 )( 1,984 11,269 )( 13,654 )(
0 0 0 1,381
406 381)( 673 925)(
35,746)( 48,654)( 24,807)( 7,789
5,171 10,835 4,638 3,380
30,575)( 37,819)( 20,169)( 11,169
2,294 10,533)( 9 3,478
28,281)( 48,352)( 20,160)( 14,647
11,820 26,853)( 221,157 215,121
3,520 )( 158,408)( 164,797 )( 183,703)(
28,073 )( 38,237)( 105,390 )( 56,620)(
Income tax ..............................................................................
Gain on sale of subsidiary ......................................................
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 .....................................................
Operating (loss) profit (EBIT) ..............................................
Depreciation of operating assets ............................................
Depreciation of right-of-use assets .........................................
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) ...................................
Consolidated Financial Statements of Icelandair Group hf. 2024 88
Alternative performance measures (APMs)
2024 2023 2024 2023
Traffic Q4 Q4 YTD YTD
3,729 3,539 17,158 15,666
7.6 7.5 7.9 8.4
8.8 9.0 8.2 8.4
7.0 6.8 6.2 6.2
8.4 8.8 8.9 9.5
3,107 2,719 14,180 12,767
1,021 910 4,666 4,286
76.0% 77.0% 82.7% 77.1%
3,964 3,830 18,331 16,966
83.3% 76.8% 82.6% 81.5%
3,024 2,978 2,999 2,937
6,604 3,851 21,236 15,388
41,766 43,307 140,665 177,448
256 249 1,166 1,113
0.71 0.81 0.73 0.77
Passenger mix ('000)
331 311 1,518 1,623
187 166 773 754
440 369 2,114 1,645
63 64 261 264
2024 2023
Capital structure 31.12 31.12
254,797 270,522
346,797 322,522
49,042 )( 18,192 )(
431,932 370,564
382,890 352,372
0.63 0.71
0.16 0.19
0.87 0.93
2024 2023
Other YTD YTD
911 967
122,289 144,747
117,730 143,780
3,575 3,638
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 ...............................................................................................
Net financial liabilities (USD '000) ............................................................
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.) ................
RASK (US cents) ............................................
CASK (US cents) ............................................
CASK less fuel (US cents) .............................
Yield (USD cents) ...........................................
To ................................................................
From ............................................................
Via ...............................................................
Within ..........................................................
On-Time-Performance (OTP) ........................
Passenger flights ............................................
Passenger load factor ....................................
Stage length (KM) ...........................................
Sold Block Hours - Leasing ............................
Alternative performance measures (APMs), contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 89
Traffic
Available seat-kilometers (ASK) ...........
RASK ....................................................
CASK ....................................................
CASK less fuel ......................................
Yield ......................................................
Revenue Passenger Kilometer (RPK) ..
Passengers total ...................................
On-Time-Performance (OTP) ...............
Passenger flights ..................................
Passenger load factor ..........................
Stage length .........................................
Sold Block Hours - Leasing ..................
Freight ton kilometers (FTK) .................
Total CO2 emissions tons ....................
CO2 emissions per OTK .......................
Passenger mix:
To ......................................................
From ..................................................
VIA ....................................................
Within ................................................
Capital sturcture
Total cash and
marketable securities .......................
Liquidity ................................................
Net interest-bearing debt ......................
Net lease liabilities ................................
Current ratio .........................................
Equity ratio ............................................
Intrinsic value of share capital ..............
The total number of seats available on scheduled flights multiplied by the number of
kilometers these seats were flown
Passengers traveling solely within Iceland
Passengers originating in Iceland visiting destinations outside of Iceland
Passengers traveling across the Atlantic connecting in Iceland
The number of revenue passengers carried on scheduled flights multiplied by the
number of kilometers flown
Total revenues 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 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
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
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
Calculated by dividing RPK by ASK
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
Cash and cash equivalents (including cash from assets held for sale) and marketable
securities
The distance flown from takeoff to landing in a single leg
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
Alternative performance measures (APMs), contd.:
Consolidated Financial Statements of Icelandair Group hf. 2024 90
Other
Effective fuel price ................................
CAPEX, gross .......................................
CAPEX, net ..........................................
Average FTE ........................................
Average full time employee equivalent
Capital expenditure of operating assets, intangible assets and deferred cost less
proceeds from sale of operating assets
Cost of jet fuel and surcharges, including hedging results, but excluding de-icing and
emissions trading cost (pr. ton)
Capital expenditure of operating assets, intangible assets and deferred cost
Consolidated Financial Statements of Icelandair Group hf. 2024 91
549300UMI5MBLZSXGL152024-01-012024-12-31549300UMI5MBLZSXGL152023-01-012023-12-31549300UMI5MBLZSXGL152024-12-31549300UMI5MBLZSXGL152023-12-31549300UMI5MBLZSXGL152022-12-31ifrs-full:IssuedCapitalMember549300UMI5MBLZSXGL152023-12-31ifrs-full:IssuedCapitalMember549300UMI5MBLZSXGL152022-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300UMI5MBLZSXGL152023-01-012023-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300UMI5MBLZSXGL152023-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300UMI5MBLZSXGL152022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300UMI5MBLZSXGL152023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300UMI5MBLZSXGL152023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300UMI5MBLZSXGL152022-12-31ifrs-full:MiscellaneousOtherReservesMember549300UMI5MBLZSXGL152023-01-012023-12-31ifrs-full:MiscellaneousOtherReservesMember549300UMI5MBLZSXGL152023-12-31ifrs-full:MiscellaneousOtherReservesMember549300UMI5MBLZSXGL152022-12-31ifrs-full:RetainedEarningsMember549300UMI5MBLZSXGL152023-01-012023-12-31ifrs-full:RetainedEarningsMember549300UMI5MBLZSXGL152023-12-31ifrs-full:RetainedEarningsMember549300UMI5MBLZSXGL152022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300UMI5MBLZSXGL152023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300UMI5MBLZSXGL152023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300UMI5MBLZSXGL152022-12-31ifrs-full:NoncontrollingInterestsMember549300UMI5MBLZSXGL152023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember549300UMI5MBLZSXGL152023-12-31ifrs-full:NoncontrollingInterestsMember549300UMI5MBLZSXGL152022-12-31549300UMI5MBLZSXGL152024-12-31ifrs-full:IssuedCapitalMember549300UMI5MBLZSXGL152024-01-012024-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300UMI5MBLZSXGL152024-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300UMI5MBLZSXGL152024-01-012024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300UMI5MBLZSXGL152024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300UMI5MBLZSXGL152024-01-012024-12-31ifrs-full:MiscellaneousOtherReservesMember549300UMI5MBLZSXGL152024-12-31ifrs-full:MiscellaneousOtherReservesMember549300UMI5MBLZSXGL152024-01-012024-12-31ifrs-full:RetainedEarningsMember549300UMI5MBLZSXGL152024-12-31ifrs-full:RetainedEarningsMember549300UMI5MBLZSXGL152024-01-012024-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300UMI5MBLZSXGL152024-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300UMI5MBLZSXGL152024-01-012024-12-31ifrs-full:NoncontrollingInterestsMember549300UMI5MBLZSXGL152024-12-31ifrs-full:NoncontrollingInterestsMemberiso4217:USDiso4217:USDxbrli:shares