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Icelandair Posts Profit, Record Unit Revenue for 2023

Despite operating challenges in the fourth-quarter, the airline reported a record-setting year in 2023.

An Icelandair Boeing 737 MAX. (Photo: AirlineGeeks | William Derrickson)

Icelandair has posted a profit of $11 million for the 2023 calendar year, a turnaround from the $6 million loss the carrier experienced in 2022. Citing record unit revenue and strong revenue generation, Bogi Nils Bogason, President and Chief Executive Officer for the airline, stated: “It is an important milestone to turn a profit after taxes in 2023 following many challenging years. Revenue generation was very strong during the year with strong demand in all our markets, especially from North America to Iceland.”

The airline’s 23 percent increase in passenger revenue ($1.0476 billion in 2022, $1.2899 billion in 2023) may have been more if not for a drop in the final quarter due to several negative external factors. Volcanic activity in November was widely reported by the world’s press which in turn resulted in ‘weakened demand.’ This drop in revenue was further exacerbated by an Icelandic air traffic controller’s strike and a volcanic eruption in December, bringing about a fourth-quarter result that Bogason said was “below expectations and impacted the full-year results.”

Icelandair’s unique geographical position in the Mid-Atlantic has long been a key strategic competitive advantage. Customers continue to embrace the opportunity to stopover in Iceland as they travel between North America and Europe and vice versa. The airline’s load factor was up 2 percentage points in 2023 to 81.5 percent. Looking ahead to the summer of 2024, Bogason said the airline is “seeing a higher proportion of bookings on the via market than before.” To facilitate greater choice for customers, Icelandair will have 57 destinations on offer with Pittsburgh, Halifax, and the Faroe Islands being added to the network.

In the airline’s results presentation, Icelandair says it ‘is focused on growing capacity in a sustainable way.’  Across the airline’s domestic network and international markets in North America, Europe, and Greenland, more frequency and increased partner connectivity provide for three connecting banks of ‘via’ traffic. The airline cites seven destinations with three flights per day and 15 destinations that offer a double daily service.

To illustrate this strategy, Icelandair was able to offer passengers an additional 15,000 seats to Vancouver. New York saw a similar capacity increase, and Boston added a further 7,000 seats with passengers in both east coast destinations, benefitting from increased connectivity with day flights. The delivery of Airbus A321LR aircraft will begin later in 2024, contributing to an anticipated 11 percent increase in the airline’s schedule in 2024.

Continued Operating Challenges

Recent events in the small island nation have illustrated the challenges that the airline faces on an ongoing basis. Bogason is optimistic about the upcoming year, saying, “We are in a good position to respond to the challenges and seize the opportunities ahead with our flexibility to adapt to the situation at any given time.”

“I look forward to our endeavors in 2024 with our outstanding team of employees and I would like to thank them for their incredible resilience and great work during challenging times in 2023,” he continued

John Flett

Author

  • John Flett

    John has always had a passion for aviation and through a career with Air New Zealand has gained a strong understanding of aviation operations and the strategic nature of the industry. During his career with the airline, John held multiple leadership roles and was involved in projects such as the introduction of both the 777-200 and -300 type aircraft and the development of the IFE for the 777-300. He was also part of a small team who created and published the internal communications magazines for Air New Zealand’s pilots, cabin crew and ground staff balancing a mix of corporate and social content. John is educated to postgraduate level achieving a masters degree with Distinction in Airline and Airport Management. John has held the positions of course director of an undergraduate commercial pilot training programme at a leading London university. In addition he is contracted as an external instructor for IATA (International Air Transport Association) and has been a member of the Heathrow Community Fund’s ‘Communities for Tomorrow’ panel.

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