Icelandair Group Holding - Results of Shareholders Meeting 29 December 2006

At a shareholders' meeting in Icelandair Group Holding hf. on Friday 29 December the three motions put before the meeting were agreed upon. (See announcement dated 21.12.2006).

The meeting agreed a motion for the merger of Icelandair Group Holding hf. and its subsidiary, Icelandair Group hf., under the name of the subsidiary, in accordance with a plan that was presented in the prospectus for Icelandair Group Holding hf. submitted to the Iceland Stock Exchange hf. dated 27 November 2006. Icelandair Group, the subsidiary will constitute the take-over company in the merger, which means that the shares of the merged company will be listed in the Iceland Stock Exchange hf., followed by the de-listing of the recently listed shares in Icelandair Group Holding hf. This measure is scheduled for implementation in January 2007.

The meeting also agreed two motions for empowerment of the Board of Directors, on the one hand by an authorisation to approve a stock option scheme for key managers of the company and/or its subsidiaries, including authorisation for the issue and sale of new shares in connection with the stock option scheme amounting to a maximum of 6% of the total shares in the company and, on the other hand, by an authorisation to buy treasury shares in the company.

At a board meeting following the share holders meeting a stock option plan for key managers of the company and/or its subsidiaries was agreed. The plan is for the next three years and option holders are entitled to utilize a third of the option each year and only at that time. The options will be based on the average closing price on the Iceland Stock Exchange during the last ten trading days prior to the signing of each agreement. Based on that scheme the board offered Icelandair Group CEO Jón Karl Ólafsson options to buy for 5.000.000 shares, and the boards salary committee and CEO were authorised to enter into stock option agreements with key managers of the Group or/and subsidiaries, up to 89 individuals, but within the limits for the issue of new shares agreed by the shareholders earlier in the day, which amounted to the maximum of 60.000.000 shares.

For further information please contact CEO Jón Karl Ólafsson or VP Corporate Communications, Guðjón Arngrímsson, tel. 5050300