Icelandair’s EBIT is negative by USD 105.1 million in Q2 2020, down by USD 81.0 million, and net loss is USD 90.8 million. COVID-19-related one-off cost amounted to USD 43.8 million in Q2 and USD 224.8 million in the first 6 months of the year. Equity amounted to USD 118.4 million at the end of June 2020. Equity ratio was 11%. Cash and cash equivalent amounted to USD 153.6 million at the end of June 2020. Icelandair’s available seat kilometers (ASK) decreased by 97% between years and the number of passengers by 98%. Cargo flight hours doubled from last year.
Icelandair President and CEO Bogi Nils Bogason explains the situation: “The second quarter was severely impacted by the COVID-19 pandemic. We only operated three per cent of our planned passenger flight schedule but focused on keeping vital air routes open to Europe and North America. Revenue, which decreased by 85% between years, was driven by our cargo and aircraft leasing operations where our employees across the Group showed remarkable resourcefulness and flexibility to seize opportunities during this challenging time. In the second quarter, cargo flight hours doubled from last year.
We had to take difficult but necessary measures in the quarter to reduce cost and prevent cash outflow. This included significant reduction in our workforce and changes to our organisational structure. The work on the financial restructuring of the Company is progressing and we aim to have reached agreements with all our key stakeholders by the end of July, followed by a share offering in August.
All our efforts now are aimed at getting the Company through this period by using our flexibility to react quickly to changes in demand in the short term and at the same time strengthen the long-term competitiveness of the Company. I would like to thank our employees for their sheer commitment and resilience during this time and our customers for their patience and cooperation. It is crucial to have reached agreements with our cabin crew, pilot and aircraft maintenance unions and I am grateful for their important contribution in ensuring the future competitiveness of the Company. Going forward we see many opportunities for Icelandair Group’s business model and with new long-term union agreements, I strongly believe that we’ll be able to present an attractive investment opportunity for prospective investors in the coming weeks.”
Meanwhile the members of the Icelandic Cabin Crew Association (FFI) have approved the new collective bargaining agreement with Icelandair. The agreement has therefore become effective and is valid until 30 September 2025. The agreement meets set objectives of increasing productivity but at the same time ensuring competitive compensation for cabin crew. The agreement also ensures flexibility for further development of the Icelandair route network as well as flexibility for employees.
Previously Icelandair layed off all flight attendants after unsuccessful bargains with labor union and put their responsibilities on pilots.