Icelandair has reported a 2016 second-quarter net income of $26.2 million, up 17% from a $22.4 million profit in the year-ago period; however, the airline has downgraded its outlook because of market uncertainty triggered by Brexit and recent terrorist attacks.
“The group’s operations over a challenging period were successful and we have never seen better second-quarter results,” Icelandair president and CEO Björgólfur Jóhannsson said, adding that this was partly because of the airline’s growth strategy.
Second-quarter revenue rose 12.6% to $331.4 million, while expenses increased 14.3% to $279 million, producing an EBITDA operating profit of $52.4 million, up 4.3% from a $50.3 million operating profit in the prior-year quarter.
International traffic rose 18% on a 7% increase in capacity to 3.7 billion ASKs, producing a load factor of 80.8%, down 1.5 points.
However, Jóhannsson said operating conditions will get more difficult in the second half of the year, reducing Icelandair Group’s EBITDA outlook to $210-$220 million, compared with the $235-$245 million figure given in April.
“We have now lowered our EBITDA guidance in light of market uncertainties. Terrorist attacks in Europe and the outcome of the Brexit referendum have caused decline in average airfares and created a situation of uncertainty in the markets,” he said.
Despite this market turbulence, he added that Icelandair’s financial position is strong and bookings for the coming months are good.
“The company’s prospects for the remainder of the year and beyond are favorable, despite lower airfares,” he said.
In 2016, Icelandair is expected to operate 24% more flights year-on-year, with passenger numbers increasing to 3.7 million compared with 3.1 million in 2015. The majority of this growth will be from additional frequencies to Europe and North America, although the airline has added four new destinations.
Icelandair said its first two Boeing 767s are performing well and confirmed plans to add another pair in 2017.
At the end of the quarter, Icelandair Group—which also includes Icelandair Cargo, wet lease arm Loftleidir and domestic carrier Air Iceland—operated a fleet of 47 aircraft.
ATW – Air Transport World
Icelandair posts 17% raise in 2Q profits
