Icelandair Group is expecting profitability improvements in the second and third quarters, having cut its first-quarter operating loss by around 10% to $62.3 million.
Over the three months to 31 March the company recorded better results across all its business segments.
But the company is cautioning that the pace of longer-term booking has slowed, in response to the uncertain global economic situation.
Icelandair Group embarked on a transformation programme last year, and chief Bogi Nils Bogason says the company is bringing down unit costs despite inflation – the figure fell by 3% in the quarter.
Overall revenues were up 11% to $286 million, including record passenger income of $214 million, and unit revenues rose 1%.
The company intends its programme to deliver a $70 million positive impact this year, with measures worth $40 million of this total having already been implemented.
“We are not stopping there and have numerous further improvement initiatives already in the pipeline,” says Bogason.
He says summer season bookings for the ‘to’ and ‘from’ Iceland markets are stronger than last year’s level.
“We are, however, seeing slower pace of longer-term bookings, in the fall and into the winter,” he states.
“Our focus is first and foremost on the areas of the business that we can control, where we are already making good progress.
“Part of that effort is to further align our costs and service offering to the environment in which we operate and adjust our capacity to demand in line with market developments.”
Icelandair has progressed with fleet modernisation, with four Airbus A321LRs introduced ahead of the summer season. The airline hiked capacity on its passenger network by 7%.
