Icelandair reports 1H2019 passenger revenue up 8%, 737 MAX grounding cost USD50m

2 August, 2019

Icelandair reported (01-Aug-2019) the following financial highlights for 1H2019:

  • Passenger revenue up 8% year-on-year, due to a significant increase in passenger numbers in the tourist market to Iceland and in the domestic market;
  • Revenue from passenger network segment up 7%;
  • Cancellations resulting from the suspension of Boeing 737 MAX 8 aircraft had a negative impact on average airfares and revenue from passenger transport. Impact from the grounding is estimated to be around USD50 million for 2Q2019;
  • Cancellations restricted connection options for passengers and led to an imbalance in the route network between Europe and North America, thereby reducing opportunities for sales in the North Atlantic market;
  • Revenue from aviation operations decreased as a result of a reduction in the number of charter assignments, aircraft maintenance and the impact of IFRS 16;
  • Revenue from tourism operations decreased as a result of reduced sales of package tours by Iceland Travel;
  • The Icelandic króna was on average approximately 19% weaker against the USD than in 2Q2018;
  • Aircraft servicing, handling and navigation expenses increased in line with the company's increased scope of operation;
  • Other investments in operating assets, for the most part investments in the development of the ground handling facilities at Reykjavik Keflavik Airport, airport equipment and hotel operations, amounted to USD8.7 million;
  • Revenue from aircraft and aircrew lease declined by 35%, largely as a result of a decline in the number of charter flight assignments and aircraft maintenance;
  • The company's freight operations have been growing, with exports up by 24% and imports up 2%. [more - original PR]