After rapidly recovering through turbulent post-pandemic times, airlines are slowly posting their fourth-quarter results, many of which highlight strong finishes to the year. The latest carrier to do so is flag carrier Icelandair, having just posted its best fourth-quarter performance since 2015.

Passenger numbers more than doubled

The flag carrier's capacity for its route network increased by 48% year-on-year and reached 95% of 2019 levels in the fourth quarter. The airline flew 816,000 passengers, an increase of 50%. Passenger traffic grew in all markets, with the most significant increase in the “via” market, where passengers more than doubled year-on-year.

As for its load factor, the airline achieved 75.9% in the quarter, representing a year-on-year improvement of 5.6 percentage points. Unfortunately, the weather disruptions in Iceland just before Christmas significantly affected the load factor and overall operation. The negative effect on the December load factor is estimated at two percentage points.

Screenshot 2023-02-03 at 11.51.01 PM
Photo: Icelandair

But even with the disruptions, the improved fourth-quarter traffic is a testament to Icelandair's achievement of doubling its flight schedule. In total, for the year, it transported 3.7 million passengers to 51 destinations worldwide.

Best fourth-quarter passenger revenue

Given healthy load factors and improved passenger numbers, it comes as no surprise that Icelandair reported record fourth-quarter passenger revenue totaling $217.4 million. The flag carrier also posted a total income of $290.8 million, up from the $192.5 million posted in the fourth quarter of 2021.

Transport revenue was $255.3 million, representing an increase of 63% compared to the previous fourth quarter, and cargo revenue totaled around $19.9 million, down by 18%. This was a result of having lower capacity due to the maintenance of one freighter and less transit freight due to softer demand caused by the economic turmoil in Europe.

Icelandair Boeing 757
Photo: Vincenzo Pace | Simple Flying

Commenting on one of the best fourth quarter results in Icelandair's operating history, Bogi Nils Bogason, President and Chief Executive Officer of the flag carrier, noted,

"The year 2022 was characterized by a great turnaround of our business. Strong revenue generation with record passenger revenue in the year's second half shows that our business model has proven its worth yet again. We are back on track, stronger than ever, and ready to operate the largest flight schedule, in terms of frequency and destinations, in the history of Icelandair."

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Fleet renewal in progress

Last year saw the continuation of a fleet renewal process for Icelandair as the flag carrier makes progress on phasing out its older Boeing 757 aircraft fleet. Within the previous year, the airline added six Boeing 737 MAX 8 and one Boeing 737 MAX 9 aircraft to its fleet, while two MAX 8s were delivered in the fourth quarter.

Also delivered in the final quarter was a new Boeing 767-300 freighter for its cargo subsidiary, Icelandair Cargo. The new fleet addition is part of the airline's plans to expand its cargo operations, beginning with adding more widebody aircraft for increased range and freight capacity for operations to Liege, Chicago, Los Angeles, and New York.

Icelandair Boeing 737 MAX
Photo: Bradley Caslin | Shutterstock.

Icelandair's prospects for this year...

With a record fourth quarter and an overall good year for 2022, Icelandair is more than ready to fly through 2023. As the fleet renewal continues, at least four new Boeing 737 MAX aircraft are expected to be received throughout the year. The expanded development of Icelandair Cargo will also see one new Boeing 767-300 freighter added within the first quarter.

Concerning its flight schedules, Icelandair is planning to offer the highest number of destinations, the highest connectivity, and the largest number of frequencies in its entire history this year. The flag carrier's flight schedule is planned for at least 15% growth, and the total number of passengers is projected at 4.4 million to at least 54 destinations.

And for the upcoming summer season, the airline aims to utilize 40 aircraft to serve its entire route network, five more than in the summer of 2022. The international routes will be operated by 13 Boeing 757 aircraft, three Boeing 767 aircraft, and 18 Boeing 737 MAX aircraft. Domestic and Greenland flights will be operated by its Dash 8 fleet.