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Expanding business enviroment

Expanding business enviroment

“Throughout its long history, the company has consistently been able to renew itself and adapt to change, and this has been one of its key strengths.”

  • Icelandair Group and its subsidiaries operate on many markets throughout the world. The airline, transportation and tourism sectors are expanding both in and around Iceland and throughout the world, and Icelandair Group participates actively in these dynamic markets, which present opportunities for both organic and acquired growth. The outlook in general is bright.
  • Icelandair‘s route network, which forms the basis of the Group’s scheduled airlines
    operations, has grown in recent years, is growing in 2007 and has the potential and
    opportunity to grow further into international markets.
  • Worldwide cargo and charter operations have achieved an even faster growth rate
    than passenger transport and also within Icelandair Group, and further increase is
    forecasted.
  • Travel services within Iceland have been growing steadily; the current situation is
    strong and the number of tourists travelling to Iceland is growing faster than the
    average tourism growth in Europe and the world.
  • Icelandair has a long history of successful aircraft trading which has been gaining momentum
    through the foundation of Icelease and the expanding aircraft trading activity in
    recent months.


According to the International Air Transport Association, IATA, which represents airlines
comprising over 95% of the world market, passenger flights grew by 5.9% and profits of
world airlines improved in the year 2006. Cost reduction, improved efficiencies and careful
capacity management have positioned the industry to achieve higher profitability.


According to IATA surveys within the industry, the focus of airline executives in 2007 is
efficiency. Industry-wide revenue growth is expected to be 4.5% in 2007. While lower oil
prices are a welcome relief, they remain more than double the price in 2000. Airlines have
reduced non-fuel unit costs by an average of 3.5% per year over the last five years.
In general, Icelandair Group has developed a healthy business which generates more
than 70% of its revenue in markets outside Iceland.


Icelandair Group earned solid profits in 2006, as it has done in recent years, with improved
operating efficiency and cost control, focused distribution, strong marketing, sales and revenue
management, and has shown strength in a time that has been volatile for many
airline-related industries.

The company has a workforce of great experience and expertise in the airline, transportation
and tourism sectors, which is a must for running a profitable business in this very
competitive environment. Throughout its long history, the company has consistently been
able to renew itself and adapt to change, and this has been one of its key strengths.
The strategy is to expand, both in Iceland and internationally, and at the same time focus on
profitable operation.



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