Annual and Sustainability Report 2022
Performance in 2022

Performance in 2022

2022 was a turnaround year for Icelandair. The Company used the flexibility of its business model to rapidly increase its capacity to meet the demand recovery in all its markets. The revenue performance was strong, with record passenger revenue in the year’s second half and significant EBIT improvement year-on-year.


Capacity in the passenger network more than doubled

As measured in available seat kilometers, the flight schedule more than doubled compared to 2021 and equaled 79% of 2019 levels. The total number of passengers on international and domestic flights was 3.7 million in 2022 compared to 1.5 million 2021, an increase of 150% between years.

The “from” market, with travel originating in Iceland, accounted for 15% of Icelandair’s total passengers. The “via” market between Europe and N-America accounted for 37% of total passengers. The domestic operation “within” Iceland accounted for 7% of total passengers. The passenger load factor over the year 2022 was at 80%.

Sold block hours in charter flights increased by 9%. Freight measured in Freight Ton Kilometers decreased by 7% between years. The on-time performance for the year was 73.5% compared to 84.0% in 2021, largely affected by challenging conditions at airports during the summer peak.

2022 2021 % Chg.
Passenger flights total
Number of passengers Thousand 3,658 1,461 150%
Load factor % 79.7 65.3 14.4 ppt
Available seat km (ASK) Million 13,253 5,963 122%
International flights
Number of passengers Thousand 3,390 1,236 174%
Load factor % 79.8 65.2 14.5 ppt
Available seat km (ASK) Million 13,153 5,866 124%
On time performance % 73.5 84.0 -10 ppt
Domestic flights
Number of passengers Thousand 268,120 225,421 19%
Load factor % 77.2 70.4 6.8 ppt
Available seat km (ASK) Million 100 97 3%
Charter and cargo flights
Sold block hours Number 14,666 13,492 9%
Freight tonne km (FTK) Thousand 132,029 142,713 -7%


The year 2022 was a turnaround year

Strong revenue generation with record passenger revenue in the second half of the year and significant EBIT improvement year on year shows that the Icelandair business model has proven its worth yet again. Total operating income more than doubled year-on-year and EBIT amounted to USD 19 million improving by USD 155 million. Net loss amounted to USD 5.8 million compared to USD 105 million in 2021.

Earnings development 2022 2021 Change
Total revenue USDk 1,265,118 584,913 680,205
Total operating cost excl. depreciation USDk 1,127,392 607,716 519,676
EBIT USDk 18,851 -135,939 154,790
EBT USDk 179 -130,059 130,238
Net loss USDk -5,819 -104,796 98,977
EBIT ratio % 1.5 -23.2 24.7


Record passenger revenue in the second half of the year

Transport revenue totaled USD 1,130.3 million, up by 149% between years. Transport revenue counts for 89% of the Company’s total operating income. Of this figure, passenger revenues amounted to USD 975.3 million and compared to 333.8 million last year. Icelandair divides its route network into four markets – to, from, via and within Iceland. The increase in passenger revenue was greatest in the “via” market between Europe and N-America,

but passenger revenue also increased significantly in the three other markets with improved load factors and higher yields in both cabins. Cargo revenue decreased by 5% compared to 2021 and amounted to USD 82.7 million. Cargo volume decreased by 7% between years, driven by less capacity due to maintenance work on two of the company’s freighters during the year and softer demand for exports.

Revenue from aircraft and aircrew leases recovered significantly

Revenue from aircraft and aircrew leases increased from USD 42.7 million in 2021 to USD 58.5 million in 2022. The leasing operation recovered significantly during the year, with an increased operation for its main long-term customers along with new projects being secured.

Sold block hours increased by 9%, and the profitability improved strongly over last year. Other revenue totaled USD 76.4 million in 2022, down from USD 88.4 million from the preceding year. Lower revenue from tourism due to the divestment of Iceland Travel in December 2021 accounts for the largest share.

USD thousand 2022 2021 Change % Change
Transport revenue 1,130,252 453,868 676,384 149%
Passenger and ancillary 1,047,557 366,482 681,075 186%
Cargo 82,695 87,386 -4,691 -5%
Aircraft and aircrew lease 58,510 42,676 15,834 37%
Other operation revenue 76,356 88,369 -12,013 -14%
Total 1,265,118 584,913 680,205 116%


Operating expenses excluding depreciation amounted to USD 1,127.4 million and increased by USD 519.7 million from 2021. The main drivers are a larger scope of business and higher fuel prices.

The capacity measured in available seat kilometers increased by 122% between years and the Icelandair route network had reached 95% of the 2019 capacity in the fourth quarter.

USD thousand 2022 2021 Change % Change
Salaries and salary related expenses 308,591 215,485 93,106 43%
Aircraft fuel 374,490 119,886 254,604 212%
Aircraft lease 1,757 705 1,052 149%
Aircraft handling, landing and communication 115,392 65,079 50,313 77%
Aircraft maintenance expenses 78,991 49,783 29,208 59%
Other operating expenses 248,171 156,779 91,392 58%
Total 1,127,392 607,717 519,675 86%

The average number of full-time employees increased by 46% year-on-year

Salaries and salary-related expenses amounted to 308.6 million, increasing from USD 215.5 million. The average number of full-time employees was 3,045 in 2022 compared to 2,087 in 2021, an increase of 46%.

Effective price increased by 57% in 2022

Fuel expenses amounted to USD 374.5 million and more than tripled between years. The difference year-on-year is explained by the significant ramp-up of the operation and 59% increase in average effective fuel price.

The average effective price (including hedges) in 2022 was USD 1,156 m/ton, as compared to USD 727 m/ton in 2021. A larger B737 MAX fleet positively contributed to fuel savings.

Ramp-up of operation main reason for higher cost

Other operating expenses amounted to USD 248.2 million, compared to USD 156.8 million in 2021. During the first months of the year, operation was negatively impacted due to Covid related restrictions and border closures, which were then significantly eased in the spring. Following that period, Icelandair experienced, as the entire aviation industry, operational challenges, such as congestion at foreign airports, that lead to disruptions during the summer peak.

In addition severe weather conditions towards the end of the year resulted in costly flight cancellations during the busy Christmas travel period. Customer service costs totaled USD 45.5 million compared to USD 13.9 million last year. Tourism expenses decreased with the divestment of Iceland Travel in December 2021. The main reason for the increase in other expense categories is mainly a larger scope of business

Net finance expenses of USD 24.3 million

Net finance cost totaled USD 24.3 million in 2022, as compared to net finance income of USD 0.6 million in 2021. The finance income amounted to USD 8.8 million down from USD 13.2 million in 2021. Finance cost totaled USD 32.6 million up by USD 11.8 million between years.

A net currency exchange loss of USD 5.5 million was included in the finance cost in 2022. Fair value changes were negative by USD 0.6 million in 2022 compared to positive changes of fair value in 2021 of USD 8.2 million.

EBIT margin guidance for 2023 is 4-6%

The booking pattern is gradually returning back to normal with all Icelandair markets showing robust performance during the important booking period at the start of the year. All markets are performing well with North America showing significant strength. The development of the air freight hub in Keflavik creates additional growth opportunities and the outlook for the leasing operations is strong.

The operating environment of Icelandair will however remain challenging due to bleak global economic outlook, higher inflation as well as higher labor cost, and historically high fuel price. The EBIT margin guidance for the year is between 4% and 6%. The guidance for the year assumes an average exchange rate of USD against the ISK of 136, the price of fuel (net of hedging) at USD 950 per metric ton, and ETS per unit at EUR 90.