Icelandair Group (ICEAIR) Q3 2024 earnings summary

Executive summary

• Q3 2024 EBIT was $83.5 million, down from $112 million year-over-year, mainly due to softer demand to Iceland and a shift in passenger mix impacting yields.

• Record on-time performance and robust maintenance contributed to lower unit costs despite high inflation, with CASK down 2% year-on-year.

• Passenger numbers in Q3 rose 9% year-over-year to 1.7 million, with a 31% increase in connecting passengers.

• Strategic partnerships expanded, including becoming Southwest Airlines' first airline partner and signing agreements with Emirates, TAP, Air Greenland, and Atlantic Airways.

• Cargo and leasing operations showed strong results, with cargo returning to profitability and leasing EBIT at $4.9 million.

Financial highlights

• Q3 passenger revenue was $496.5 million, down 2% year-on-year; cargo revenue was $16.9 million, down from $21 million.

• Leasing revenue rose to $23.2 million; leasing segment delivered $4.9 million EBIT.

• Net profit for Q3 was $69.2 million, down from $84.5 million year-over-year.

• Operating expenses increased 4% to $427 million; salary costs slightly reduced and employee count down 4%.

• Total liquidity, including undrawn credit lines, was $396 million at quarter-end.

Outlook and guidance

• Q4 2024 bookings are stronger than last year, with signs of unprofitable capacity exiting the market and improved profitability expected.

• Full-year 2024 EBIT forecasted to be negative $10–20 million; no published EBIT guidance for 2025 yet.

• Capacity to increase by around 9% in 2025, mainly in shoulder seasons, with the same number of aircraft.

• Transformation program "ONE" aims for $70 million annual run-rate savings by end of 2025, targeting 8% EBIT margin.

• Leasing operation expected to continue strong performance in coming months.