Icelandair profit drops despite revenue growth as costs rise

Investing.com - Icelandair Group reported third-quarter net profit of $57.3 million, down $11.9 million YoY despite revenue growth, as the airline faced higher costs and currency headwinds.

The company’s total revenue increased 6% to $585.3 million, with record passenger revenue of $522.1 million.

The airline’s EBIT declined to $74.4 million from $83.5 million in the same quarter last year, impacted by a $10 million negative currency effect and other adverse cost factors.

Following the earnings release, Icelandair shares fell 1.1% as investors reacted to the profit decline despite revenue growth.

"Revenue increased year-on-year despite fare pressure in the transatlantic market, but costs were adversely affected by several factors," said Bogi Nils Bogason, President & CEO of Icelandair. "This led to the results for the third quarter being below our expectations."

The airline carried 1.7 million passengers during the quarter, a 2% increase from the previous year, with strong demand to and from Iceland. Icelandair also noted it was the most punctual airline among larger carriers in Europe during July and September, according to Cirium.

The company has implemented transformation initiatives expected to deliver over $100 million in annual impact. These include rationalizing capacity for 2026, reducing the fleet by two aircraft, and planning to cease operation of Boeing 767 widebody aircraft by the end of 2026.

Icelandair’s liquidity position strengthened to $502.8 million at quarter-end, a $107 million improvement YoY. However, the company forecasts full-year EBIT to be in the range of negative $10-20 million, highlighting ongoing challenges despite transformation efforts.

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