DALLAS – Icelandair (FI) has reported strong financial results for the third-quarter ending September 30, 2022, with an operating profit of US$92.7m, a net profit of US$57.8m, and record passenger revenues of US$408m.
With 1.4 million passengers recorded for the quarter, the Icelandic flag carrier achieved 82% of its pre-crisis capacity. Revenues amounted to US$487m, including the record passenger revenues of $408m—unit revenues were up by 38% year-on-year.
Plagued by high fuel costs in this quarter, the carrier reported fuel costs at $137m (which represents 38% of operating expenditure)—resulting in an operating profit of $92.7m.
Earnings before interest and taxes (EBIT) stood at 92.7m with a 19% EBIT margin—84.5m year-on-year. EBIT measures a company’s operating profitability; therefore these results further cement FI’s robust recovery for Q3. With record load factors and amid various economic challenges, the company reported its strongest cash position ever.
Transatlantic Market Summer Recovery
The Icelandic carrier joins many other airlines that would have credited a strong market recovery for their upbeat financial results in Q3. FI’s CEO and president, Bogi Nils Bogason, stated that the transatlantic market recovered quickly and accounted for 43% of passengers this quarter.
The carrier currently operates 15 North- American routes (previously 19 in 2019) and according to data retrieved from Cirium FI has 3,068 North American departures this summer. “We had robust results on the back of strong post-pandemic travel demand during a period where Icelandair’s business model proved its worth,” said Bogason
Similar to the current trend of strong passenger demand, the airlines also faced identical setbacks, including supply chain and staffing issues, which led to delays and cancellations. FI stated that it managed to reduce delays and other punctuality issues by imposing high frequency and diverse departure times. Bogason further added that “we believe there will continue to be great opportunities for Iceland and we have a strong foundation to build on”
The airline is predicting strong bookings in the fourth quarter, with capacity predictions set at 98% of pre-pandemic levels, whilst considering that the current economic state (high cost and interest rates) will negatively impact passenger demand. However, booking trends are stable and “resilient” going into 2023.
Featured image: Alberto Cucini/Airways