Icelandair's earnings before interest and taxes (EBIT) dropped $2.5 million to $775,000 in the second quarter of 2025. Net profits jumped from $622,000 to $12.9 million in the quarter.
“Operating results were negatively impacted by softer travel demand in the via market due to the current geopolitical environment and by the strengthening of the Icelandic krona,” said Icelandair CEO and president Bogi Nils Bogason.
He said the Icelandic krona is “now near historical high". He continued: “This level of appreciation has historically proven unsustainable and poses challenges for export-driven sectors. It is therefore critical that economic policy reflects these realities — especially in light of the Icelandic Government's announced plans to increase taxation on the tourism sector.”
The company said it will focus on areas within its control such as strict cost management, operational efficiency, capacity allocation, and strengthened revenue generation. These initiatives are expected to deliver $90 million in annual impact when implemented fully.
Additionally, third quarter booking are ahead of last year, Bogason said, with profitability expected to improve. However, longer-term bookings into the autumn and winter have been slower compared to last year, though as the trend of passengers booking closer to departure continues, the company is “optimistic” that travellers still prioritise travel. The company will be entering negotiations of its collective bargaining agreements with pilots and cabin crew.
For the quarter, the company's total income climbed by $53.3 million to $462.7 million. Operating costs climbed by $49.7 million to $418.5 million.
As of the end of the period, the company's total liquidity was $572.2 million.