Quarterly EBITDA earnings fell to $115 million, compared to $155.9 million for the same period last year.
As expected, Icelandair has posted worsening results for its third quarter, in a crisis at the airline that has already claimed the scalp of the group’s president and chief executive, Björgólfur Jóhannsson.
Total income was up 2% year-on-year to $545.2 million. But EBITDA earnings fell to $115 million, as compared to $155.9 million in the same period last year. Net profit was down to $62 million.
The group’s net interest-bearing debt stood at $222.2 million at the end of September, cash and short-term investments at $184 million and EBITDA guidance for the year at $80-90 million.
Last year’s EBITDA stood at $170.2 million, as compared to $219.8 million in 2016. Earnings for this year’s fourth quarter are expected to be negative.
Icelandair blames the decline in performance as a result of reduced passenger income and high jet fuel prices.
“Our third-quarter results declined between years, but are in line with the EBITDA guidance published at the end of August,” said interim president and chief executive Bogi Nils Bogason.
“Higher fuel prices, low average air fares and a less favourable passenger load factor are the principal reasons for the decline in performance,” he added.
A number of measures have been taken to improve the company’s competitiveness and counteract the cost increases, Bogason said.
In May 2019, flights will be introduced through a “new connection bank” in Iceland alongside the current route network with a view to creating new growth opportunities, improving services and increasing flexibility.
The imbalance in the passenger capacity between North America and Europe has also been corrected in the flight schedule for next year, the interim chief assured, and the company’s sales and marketing work – previously partially blamed for the situation – has been reorganised.
“Our focus now is on strengthening the company’s revenue control, with the implementation of a new revenue control system at an advanced stage,” Bogason said.
“The priorities are increased automation, use of digital solutions and enhancement of ancillary revenue,” he continued, adding that “improved utilisation of staff” would also be key to future operations.