Performance in 2020

The year 2020 was the most challenging year in aviation history, with the global pandemic causing almost a complete halt to air travel. Total operating income was USD 433.6 billion, down by 71% between years. EBIT was negative by USD 363.0 million down by USD 323.7 million from 2019 million. Net loss amounted to USD 376.2 million, as compared to net loss of USD 57.8 million in 2019. COVID-19 related impairment amounted to USD 136.1 million, thereof, impairments related to goodwill of USD 116.2 million and impairments of investments in associates of USD 19.9 million.

Transport figures

The operations of Icelandair Group was heavily impacted by the COVID-19 pandemic and associated travel restrictions in 2020. The capacity of Icelandair route network decreased by 81% year-on-year with a corresponding 83% drop in the number of passengers. Icelandair carried more passengers in the first two months of the year than in the remaining ten months due to the COVID-19 related drop in demand. The capacity Air Iceland Connect decreased between years due to COVID-19 but less than the capacity of the Icelandair international route network. This is in line with the global airline market, where international traffic has overall been weaker than domestic traffic during the pandemic. The domestic and regional capacity was down 58% year-on-year with a 55% drop in passenger numbers. Icelandair’s Cargo operation was much less affected by the situation than the passenger services. Due to decreased capacity in the Icelandair route network, most of the freight volume is now transported with cargo aircraft. As a result, the freight volume decreased much less than the reduction of the route network, or by 14% in 2020. Sold block hours on charter flights decreased by 53%.

2020 2019 % Chg.
International flights
Number of Passengers Thousand 763 4,408 -83%
Load Factor (LF) % 67.2 82.0 -14.8 ppt
Available Seat KM (ASK) Million 3,130 16,679 -81%
On time performance Number 85.0 74.0 11.0 ppt
Regional and Greenland flights
Number of Passengers Thousand 128 282 -12%
Load Factor (LF) % 65.9 70.5 5.0 ppt
Available Seat KM (ASK) Million 61 143 -21%
Charter flights
Sold Block Hours Number 14,180 30,118 -53%
Freight Tonne KM (FTK) Thousand 114,956 132,989 -14%


The COVID-19 pandemic and the associated wide-ranging travel bans resulted in dramatic drop in demand, affecting the Group’s operations and financial performance heavily in 2020. Net loss amounted to USD 376.2 million compared to a loss of USD 57.8 million in 2019. EBIT was negative of USD 363.0 compared to negative EBIT of USD 39.3 million in 2019. Icelandair took it‘s role as the lead Icelandic carrier seriously during this time and ensured to keep vital routes open to and from Iceland, both for passengers and cargo. During the year extensive measures were taken to scale down the Company‘s business and strengthened the long-term competitiveness of Icelandair Group by completing a financial restructuring which included a successful share offering.

During this time, focus has been on preserving the necessary infrastructure to be able to react quickly to changes in our markets. This proved successful during the summer when border restrictions were eased temporarily, and Icelandair was able to ramp up quickly to meet increased demand. Furthermore, an important value was created through the cargo and leasing operations by seizing various new opportunities during the year.

Earnings development 2020 2019 Change
Total revenue USDk 433,591 1,504,495 -1,070,904
Total operating cost excl. depreciation USDk 520,085 1,366,519 -846,434
EBIT USDk -362,995 -39,297 -323,698
EBT USDk -437,834 -72,601 -365,233
Net loss USDk -376,176 -57,779 -318,397
EBIT ratio % -83.7 -2.6 -81.1 ppt


Cargo revenues up by 14%

Transport revenue totaled USD 265.5 million, down by 77% between years. Of this figure, passenger revenues amounted to USD 177.3 million and decreased by 82% compared to last year. The capacity of the international route network decreased by 81% with corresponding 83% drop in the number of passengers. The Company’s cargo operation was much less affected by the situation with cargo volumes down by 14% and cargo revenue amounting to USD 66.4 million, increasing by 14%.

The capacity of the international route network decreased by 81% with corresponding 83% drop in the number of passengers.

Other revenues decreasing due to COVID-19

Revenue from aircraft and aircrew lease decreased from USD 91.4 million in 2019 to USD 64.7 million in 2020. Other revenue totaled USD 103.3 million in 2020, down from USD 253.3 million from the preceding year. Revenues from tourism account for the largest share, decreasing by USD 86.1 million as a result of near total drop in demand in sales of package tours by Iceland Travel and Vita. The decrease in sale in hotels and airports is primarily due to the divestment of Icelandair Hotels end of Q1 2020. Settlement with The Boeing Company regarding compensation for the loss incurred from the MAX suspension is included in other revenues in 2020.

USD thousand 2020 2019 Change % Change
Transport revenue: 265,523 1,159,524 -894,001 -77%
Passenger and ancillary 199,040 1,101,088 -902,048 -82%
Cargo 66,483 58,437 8,047 14%
Aircraft and aircrew lease 64,739 91,647 -26,908 -29%
Other operation revenue 103,329 253,324 -149,995 -59%
Total 433,591 1,504,495 -1,070,904 -71%


The management of Icelandair Group responded quickly and took extensive measures to get the Company through an extended period of minimum operations. From April – December the flight schedule was scaled down to 9% of the originally planned schedule, the number of employees was reduced considerably and changes were made to the organizational structure, including integration of Air Iceland Connect into the operations of Icelandair and reduction in the number of management positions. The goal of all these actions was to trim down operational expenses and minimize cash outflow but at the same time secure the continuity of necessary core operations and safeguard the flexibility needed for a quick scale-up when markets recover.

All main deviations are directly related to the adverse effects of the pandemic

USD thousand 2020 2019 Change % Change
Salaries and salary related expenses 207,892 489,828 -221,416 -52%
Aircraft fuel 76,450 323,518 -247,068 -76%
Aircraft lease 7,423 32,174 -24,751 -77%
Aircraft handling, landing and communication 40,399 133,585 -93,186 -70%
Aircraft maintenance expenses 47,179 79,178 -31,999 -40%
Other operating expenses 140,742 368,756 -228,014 -62%
Total 520,085 1,366,519 -846,434 -62%

Salaries and related expenses decreased by 58% between years

Salaries and salary related expenses amounted to 207.9 million, decreasing by USD 221.4 million. Expensed term of notice amounted to USD 68.3 million. Repayments of notice period payments from the Icelandic Government, in accordance with Icelandic act no. 50/2020, due to those actions amounted to USD 28.3 million. Therefore, net expenses due to term of notice were USD 40.1 million in 2020. The average number of full-time employees was 2,621 in 2020 compared to 4,715 in 2019.

Aviation expenses decreased with less production

Aviation expenses amounted to USD 171.5 million, down by USD 397.0 million, mainly due to less production, with available seat kilometers down by 81% in the international route network. Fuel expenses amounted to USD 76.5 million, down by 76%. Settlement of fuel hedge contracts accounted for in fuel cost amounted USD 11.5 million. Aircraft lease amounted to USD 7.4 million, down by USD 24.8 million. Aircraft handling, landing and navigation expenses decreased in line with less production due to COVID-19. Maintenance expenses amounted to USD 47.2 million compared to USD 79.2 million in 2019.

Other operating expenses down by 62%

Other operating expenses amounted to USD 140.7 million compared to USD 308.2 million in 2019. The divestment of Icelandair Hotels at the end of Q1 2020 explain USD 20.6 million of the decrease between years. All other main deviation between years are directly related to the adverse effects of the COVID-19 pandemic.

COVID-19 related impairment USD 116.2 million

Total depreciation of operating assets amounted to USD 136.8 million in 2020, as compared to USD 143.9 million in 2019. Depreciation of right-of-use assets amounted to USD 20.6 million. Amortization of intangible assets totaled USD 3.0 million. An impairment test was conducted on 31 March 2020 that led to impairment of intangible assets of USD 116.2 million. An impairment test was also conducted at year-end which led to no further impairment.

Net finance cost USD 47.4 million

Net finance cost totaled USD 47.4 million in 2020, as compared to USD 26.0 million in 2019. The finance income amounted to USD 2.7 million down from USD 7.0 million in 2019. Net currency exchange gain of USD 3.9 million was included in finance income in 2019. Finance cost totaled USD 29.6 million down by USD 3.4 million between years. Net currency exchange loss of USD 6.1 million was included in finance cost in 2020. Negative changes of fair value in 2020 amounted to USD 43.0 million. Gain on sale of a subsidiary had positive effect on net finance cost of USD 22.5 million.