Icelandair Group (ICEAIR) investor relations material

Executive summary

• Record Q3 revenue of $655.0m, up 12% YoY despite 6% lower capacity; EBIT reached $120.3m, up $45.9m and the strongest quarterly result since Q3 2017.

• Stronger passenger mix and yields supported profitability, while high fuel prices, a strong ISK and September industrial action weighed on results.

• ONE delivered $40.2m of Q3 impact, with expected annualized impact of $138.3m when fully realized.

• Nine-month revenue rose 12% to $1,497.7m and EBIT increased to $37.3m from $12.9m.

Financial highlights

• Q3 passenger revenue rose 11% to $579.0m, cargo revenue 11% to $20.2m and leasing revenue 30% to $28.7m.

• Operating expenses increased 5% to $489.3m; fuel expense rose 11% to $131.5m, partly offset by hedging and fleet efficiency.

• Net profit was $96.7m versus $57.3m YoY; EBT was $116.4m versus $72.1m.

• Q3 EBIT margin rose to 18.4% from 12.7%; basic EPS was $0.24 versus $0.14.

Outlook and guidance

• FY2026 EBIT guidance is a loss of $20m–$30m amid a challenging Q4 and continued cost pressure.

• Q4 capacity is expected to decline 3% YoY; unit revenue is forecast to rise 6%–9% and unit cost excluding fuel to increase 7%–9%.

• Guidance assumes Q4 jet fuel at $1,500/mt and an ISK/USD rate of 122; winter bookings are later and competition has increased in selected European markets.

• Winter capacity was cut 4% for Q4 2026 and 8% for Q1 2027 versus original schedules; summer 2027 plans include selective growth and slightly lower overall capacity.