Icelandair Group generated US$19.6 million in net profit in the third quarter (Q3) 2021 despite the Delta variant negatively impacting September load factor and unit revenues. Icelandair further strengthened its liquidity, which amounted to US$454.4 million at the end of the quarter. Net cash from operations was US$25.2 million compared to a loss of US$88.3 million in Q3 2020.
Icelandair continued its network and operational ramp up during the quarter, serving 34 international destinations, 11 in North America and 23 in Europe. The total number of passengers was around 700,000 – which is almost fourfold compared to last year – with a load factor of 68.2% and on-time performance of 86%.
The airline reports cargo operations as strong with volumes and revenues exceeding pre-COVID levels. Transit freight increased considerably and was 10% of total transported freight, compared to 3% in 2020.
The company states that it experienced a booking trend setback during August and September caused by the rise of the Delta variant. The situation has, however, recovered and bookings have been strong during the last few weeks. Icelandair described the opening of the US borders for European travellers as a “crucial milestone for the company” expecting now that all of its markets will be open in the fourth quarter. Icelandair plans to increase Q4 capacity from 50% of 2019 capacity levels in Q3 to up to 65% of 2019 levels, serving 11 destinations in North America and 15 in Europe. The group warns however that, in addition to the continued impact of the pandemic and accompanying travel restrictions, high fuel prices will negatively affect operational results in the fourth quarter.
"We are pleased to have turned a profit from regular operations in the quarter for the first time in two years, driven by our successful ramp up over the past months,” said Bogi Nils Bogason, President and CEO. “Going forward, we see strong booking trends. The opening of the US borders means that we can finally start harnessing the full potential of our route network for the first time since March 2020. Looking at the big picture, the recovery of Icelandic tourism is greatly dependent on the competitiveness of Iceland as a tourist destination. Therefore, it is important that Icelandic authorities review the current border restrictions and ensure they are simple, efficient and in line with those of the countries around us. As for Icelandair, we are well prepared for the months ahead – with our highly flexible operations, robust infrastructure and a strong liquidity position, underpinned by great teams of experienced people across the business.