Icelandair Group hf.: Profitable growth in 2017 in a challenging environment

-- Year's EBITDA USD 170.2 million, as compared to USD 219.8 million in 2016
  -- Year's profit after taxes USD 37.7 million, as compared to USD 89.1 million
     in 2016
  -- EBITDA in Q4 negative by USD 16.9 million, down between years
  -- Total revenue increased by 14% over the 4th quarter
  -- Equity ratio 42% at year-end
  -- EBITDA guidance for 2018 USD 170-190 million

Björgólfur Jóhannsson, President and CEO

"The year's performance is in line with our last EBITDA guidance. The Company's
profitable growth continues, and our strong financial position and flexibility
enable us to respond to new circumstances and seize new attractive and exciting
market opportunities. The Company transported a record number of over four
million passengers on international flights over the year. 

At the end of this month we will take delivery of our first 737-MAX aircraft.
The arrival of the aircraft represents a certain milestone as the start of the
renewal of our fleet, a large and exciting undertaking. We have in recent
months made some changes in our product offerings with new options for
customers, such as Economy Light. Furthermore, flights have been introduced to
seven new destinations. Innovations and adaptations of this kind reflect the
Company's flexibility and financial strength, enabling us to respond to the
demands of a constantly changing market. 

Competition is fierce in all our markets. The booking status for the first half
of the year in international transport is good, but there is considerable
uncertainty regarding the second half of the year, especially with regard to
average fare trends. The Company's earnings guidance for 2018 reflects this
uncertainty, with EBITDA projected at 170-190 million USD. 

At the beginning of this year we announced a new structure for the Company. The
change will bring about a clearer focus on our core business and at the same
time streamline our processes with shorter lines of communications and improved
operational efficiency. This will make us better positioned to take on a
volatile business environment resulting from advancing globalisation and
changes in technology. As usual, the Company's talented staff has done an
outstanding job and our customers have faith in us. We are grateful for their
continuing trust." 

For further information please contact:

Björgólfur Jóhannsson, Chief Executive Officer of Icelandair Group, tel: +354
896-1455. 
Bogi Nils Bogason, Chief Financial Officer of Icelandair Group, tel: +354
665-8801.

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