Icelandair Group- Improved results between years in spite of high fuel prices

Total turnover was ISK 16.0 billion, down by 2% between years

EBITDA was negative by ISK 0.2 billion, as compared to a positive result of ISK 0.2 billion in the preceding year

EBIT was negative by ISK 1.4 billion, as compared to a negative result of ISK 1.2 billion in the same period of last year Depreciation amounted to ISK 1.2 billion, down by ISK 0.1 billion from the preceding year

Financial cost amounted to ISK 0.4 billion, as compared to ISK 0.7 billion in the preceding year

Loss after taxes amounted to ISK 1.1 billion, as compared to an after-tax loss of ISK 1.9 billion at the same time in 2010

Cash and marketable securities at the end of the quarter amounted to ISK 18.1 billion, as compared to ISK 13.0 billion at year-end 2010

Total assets amounted to ISK 91.4 billion and the equity ratio was 30% at the end of the first quarter of 2011, as compared to ISK 84.2 billion and 34% respectively at year-end 2010

Björgólfur Jóhannsson, President and CEO:

“The Group’s results in the first quarter improved between years despite the huge increases in fuel prices. Losses amounted to ISK 1.1 billion, as compared to ISK 1.9 billion at the same time last year. EBITDA was negative by ISK 0.2 billion, as compared to a positive result of ISK 0.2 billion last year. Fuel prices on average were 42% above the prices in the first quarter of last year. The resulting increase in the Group’s cost is assessed at ISK 0.8 billion. In light of external conditions we are satisfied with the outcome of the quarter.

The capacity in the Company’s international route network was increased by 12% between years, and the number of passengers increased by 13%. The number of passengers increased in all our markets, with largest increase, 20%, in the North Atlantic market. Icelandair’s load factor was the highest ever recorded for this quarter, at 71%. The booking position for the coming months is favourable and there are indications of a record number of tourists to Iceland. The exchange rate trends of the euro and dollar have been favourable to the Company, partly offsetting the increase in fuel prices. The Company’s EBITDA forecast for the year as a whole is therefore unchanged at ISK 9.5 billion.”

The Company is financially strong. Cash and marketable securities at the end of the quarter stood at approximately ISK 18 billion, up by over ISK 5.1 billion from the start of the year. Equity stands at ISK 29.4 billion and the equity ratio at 30%.”