Travel Service boosts Icelandair Group’s quarterly results

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(Clarifies Iceland-specific reference from 'in irons' to 'around breakeven'.)

Icelandair Group has posted improvements to its second-quarter turnover and profitability, boosted by its integration of Czech carrier Travel Service and the weakness of the Icelandic krona.

During the second quarter the group's revenues were 79% up at IcKr29 billion ($350 million). EBITDA rose to IcKr1.9 billion from IcKr1.3 billion and EBIT increased to IcKr901 million from IcKr636 million. Net profits rose by IcKr190 million to IcKr395 million and EBITDAR more than doubled to IcKr5.3 billion.

But Icelandair Group CEO Bjorgolfur Johannsson says this performance was largely driven by the inclusion of Travel Service and the weakness of the Icelandic krona, while its core carrier Icelandair stood at around breakeven.

He says: "The period was characterised by extensive growth, largely as a result of the addition of the Czech airline Travel Service to the group. This is now the second-largest subsidiary of Icelandair Group and showed good second-quarter results.

"Companies within the group have responded to high fuel prices and dwindling demand through cost containment and income management. The operation of Icelandair, the group's largest company, is at around breakeven, but the company has launched efficiency measures which look promising."

Three-quarters of the group's operating revenues were generated outside Iceland and Johannsson says this diversification, together with a company-wide action plan, is delivering positive results and an improved cash position.

During the first six months of the year turnover stood 53% up at IcKr43 billion, although EBITDA fell to IcKr998 million from IcKr1.2 billion.

The group's EBIT losses deepened to IcKr762 million, compared with last year's IcKr197 million interim loss, and net losses widened to IcKr1.3 billion from IcKr1 billion.