The carrier lost almost €50 million in the first quarter of the year, and its problems are being compounded by the 737 MAX.
Icelandair lost ISK 6.7 billion (€49 million) in the first quarter of the year, a result that was poorer than anticipated by many analysts in the market, the Icelandic online newspaper Kjarninn reports.
Sector analysts at the country’s banks Landsbankinn and Arion Bank had both forecast a loss of around ISK 6.3 billion, while the management consultancy Capacent had expected a loss of ISK 5.5 billion.
This means that in the last two quarters the company lost ISK 13.5 billion. CEO Bogi Nils Bogason admits that the operating environment has been difficult in recent quarters, accusing competitors such as the now-bankrupt WOW air of selling tickets at unsustainable prices.
However, despite the difficult situation the company’s long-term prospects and Icelandic tourism overall are good, the company claimed in a statement to the stock exchange.
But total revenues for the first quarter stood at just over ISK 30 billion, down 7% year-on-year, Kjarninn reports.
Meanwhile, Icelandair has made more changes to its flight schedules due to the further suspension of the Boeing 737 MAX.
On April 10, it had made changes to its schedules up to mid-June, but “it is now expected that the suspension will last longer and Icelandair has therefore updated its flight schedule until July 15”.
To minimise the impact on passengers, the airline entered into leasing agreements in April for three additional aircraft that will be in operation until the end of September.
These are two 262-seat Boeing 767s and one 184-seat 757-200. The 737 MAX has 160 to 178 seats. So with these changes, the total seating capacity during the period will decrease by less than 2%, Icelandair says.