Icelandair Group hf.: Execution of a Share Repurchase Program

The Board of Directors of Icelandair Group hf. (the "Company") has decided to
execute a share repurchase program in order to reduce the share capital of the
Company. This decision was made following authorisation given by the Annual
General Meeting on the 3rd of March 2017, which gave the Board of Directors
permission to execute a share repurchase program where up to 10% the Company's
shares would be purchased within a period of 18 months 

The share repurchase will at most amount to 50 million shares or 1.00% of the
total share capital. Currently, the Company owns 139,460,000 of its own shares,
or 2.79% of the total share capital. However, shares will not be purchased in
excess of a total value of 750 million ISK. The share repurchase program will
be valid until the end of the 3rd of September 2018. The financial services
company Kvika banki hf. will manage and operate the repurchase program, and
will make all trade decisions regarding share repurchase and the timing of such
purchases independently from the Company. 

The execution of the share repurchase program will be in accordance with
Chapter VIII. of Act No. 2/1995 on Public Limited Companies and Chapter II of
the Annex to Regulation No. 630/2005 on Inside Information and Market Abuse,
with later amendments. Share repurchase based on the share repurchase program
will be performed in stages, and shall be performed so that share purchase
within a single day will not exceed 5,040,232 shares or 25% of the average
daily trading of the Company's shares on the Nasdaq Iceland Stock Exchange in
January 2018. The price of each purchased share within the program shall not be
in excess of the highest last impartial spot market price, or the highest
recent impartial share purchase offer in the Nasdaq Iceland Stock Exchange,
whichever is higher. 

The purchase of shares performed under the share repurchase program will be
announced no later than at the end of the seventh trade day after such purchase
has been made. 

For further information, please contact:

Bogi Nils Bogason, CFO
[e-mail]
 665 8801