Icelandair, group, company, ebitda, earnings, forecast, capacity, weather, 2018, warning, profit

Icelandair slashes earnings forecast

The airline group blames a multitude of factors for reduced EBITDA guidance for 2018.

The current prospects for Icelandair Group’s operations in 2018 are less favourable than earlier anticipated, the company revealed this morning.

Based on current assumptions, the group is projecting its earnings before interest, taxes, depreciation, and amortisation (EBITDA) for this year to be in the range of US$120 million to US$140 million.

Although the company’s interim financial statement has not been finalised, “it is apparent that performance in the second quarter will fall short of projections”, it warns in a statement.

Disruptions in Icelandair’s flight schedule in recent weeks, including delays in commissioning aircraft, adverse weather conditions and other negative factors, have resulted both in increased expenses and lost revenue.

In the course of preliminary work on preparing its interim financial statement for the second quarter, the company has been analysing the assumptions used in its earnings estimate for the second half of the year. Its projections for rising average fares in the second half have so far not materialised, in spite of a 50% rise in fuel prices over the past 12 months.

As a result, the company has decided to reduce its revenue forecast for the second half of the year.

More bad news
Iceland Travel, which is part of the group, has seen a significant number of cancellations recently that will negatively impact that line of the business this year.

In addition, an increase in capacity across the Atlantic in some of the airline’s key markets has affected the peak-season fare trend.

The company also says it is investing in new destinations this year to strengthen its network for the future – but the rate of bookings on flights to these destinations is falling short of anticipations. Earlier this year, it revealed it would fly to India in 2019.

For the longer term, the company insists that its prospects are favourable, as it is “seeing growth in most markets, it is financially strong and enjoys a solid market position”.

Related stories

Icelandair to fly to India in 2019

Icelandair aims to buy 49% of Azores Airlines

Icelandair starts to expand fleet with MAX delivery


Check Also

Iceland, sar, search, rescue, weather, Iceland, tourists, distress, police, advice, warning, volcano, lava field

Tourists in Iceland “underestimate the weather”

The sheer number of tourists are ignoring – or not being given – advice about places that are not safe to visit.

Öræfajökull, volcano, Iceland, erupt, tremors, ash, air traffic, airlines, travel, 2010, Eyjafjallajökull, effect, impact

Iceland volcano could paralyse air traffic

A new study looks at the impact on air travel of a major eruption in Iceland’s largest active volcano.

Finnair, A350, capacity, 2019, Hanover, Germany, flights, Helsinki, Dubai, UAE, Iceland, Warsaw

Finnair launches Hanover, ups capacity to Dubai with A350

Besides launching its seventh destination in Germany, Finnair adds extra frequencies to popular routes.

Dallas/Fort Worth, Iceland, Keflavik, airport, route, three, airlines, destination, USA,

Keflavik adds three links to one destination

Three airlines are launching routes between the Icelandic airport and the same destination in the US.

wow air, Russia, refuse, overflight, allow, asia, icelandair, Iceland, deny, charge

Russia denies attempt to block Iceland flights

The Russian Ministry of Transport has denied reports it tried to block use of Russian airspace for flights to Asia.

Wow air, India, USA Canada, Iceland, Reykjavik, stopover, fare, flights, price, cheap, low-cost, long-haul, budget

How Wow will fly “ultra-cheap” to India

CEO: “If you look at flights from India to North America, they actually go directly above Iceland.”