According to Icelandair’s updated guidance for 2023, the airline’s total revenue is expected to be around US$1.5 billion and EBIT in the range of US$50-65 million, which is around 3.3-4.3% of revenue. Icelandair says that it still expects to deliver net profit for the full year.
Icelandair says that the fuel price has increased almost 30% since the end of the second quarter.
The updated guidance is based on a weighted average fuel price (excluding hedges) of 990 USD m/t. Icelandair has hedged approximately 43% of the expected fuel consumption in the period from September to December at an average price of USD 864 m/t. The USD/ISK exchange rate is estimated to be, 134 on average during the period.
The July and August accounts demonstrate “strong financial performance of the Company’s passenger and leasing operations with considerable year-on-year improvement” says Icelandair in the guidance note, adding though that the cargo operation has remained “challenging”, and the profit improvement expected has not been realised.
The airline says that the outlook for the passenger operation “remains positive”, with strong bookings for the remainder of the year. Equally, the airline said that the outlook for its leasing business is “favourable”.
Icelandair says that it is taking “further actions” to turn the cargo business around. “Icelandair’s financial position is strong, and the Company is well positioned for further profitable growth,” the airline said.
Icelandair has finalised agreements for three new passenger aircraft for delivery next year which the company says will create opportunities to expand the route network and increase capacity by around 10% between years.
Meanwhile, the airline has announced that shareholder Islandsbanki and funds managed by Islandssjodir have disposed of their shares, dropping the combined voting rights below 5%.