Icelandair Group hf. 2007 Annual General Meeting

The Board of Directors of Icelandic Group hf. announces the Annual General Meeting of the Company for the operating year of 2006. The meeting will be held at the Nordica Hotel on Tuesday, 13 March 2007, at 4:00 p.m.

The business of the meeting is the following:

1. Regular AGM business pursuant to paragraph 4 of Article 14 of the Company's Articles of Association.
2. Motion on amendments to the Articles of Association of the Company.
3. Presentation for approval of a proposal from the Board of Directors concerning a new Icelandair Group hf. remuneration policy.
4. Any other lawfully submitted business.

Further:

A. Candidacy for seats on the Board of Directors:
Announcements of candidacy for seats on the Board of Directors shall be submitted in writing at the Company Headquarters on Reykjavík Airport before 4:00 p.m. on Thursday, 8 May 2007. Announcements of candidacy shall include, in addition to the name of the candidate, the candidate's ID number and address, information on principal occupation, other directorships, education, experience and shareholdings in the Company. Notices should also include information on any relations with the Company's principal business partners and competitors and with shareholders holding more than a 10% share in the Company.

B. Motion on payment of dividends:
The Board of Directors proposes that no dividends should be paid to shareholders for the operating year of 2006, and that earnings should accrue to equity.

C. Proposed Amendments to the Company's Articles of Association:
Proposals to amend the Articles of Association of the Company entail authorisation for the Board of Directors to permit shareholders to participate in shareholders' meetings electronically, including in polls, or that shareholders should, at a minimum, be invited to post their votes beforehand on motions submitted at shareholders' meetings. Second, the motions of the Board of Directors propose that the number of alternate members of the Board of Directors of the Company should be increased from two to three. Third, the motions include amdendments to the Articles of Association providing for clearer rules on the disclosure of information in connection with candidacies for seats on the Board of Directors and procedures relating to such candidacies.

The Agenda of the Annual General Meeting, the Company's annual accounts and finalised motions will be laid open at the Company's headquarters at Reykjavík Airport for inspection by shareholders as of 6 March 2007.

If any shareholder wishes to have a specific item of business included on the Agenda for the meeting a request to such effect should be submitted at the Company headquarters at Reykjavík Airport at the latest on 6 March 2007.

Tickets, documents of the meeting and ballots will be made available to shareholders or their agents at the venue of the meeting as of 3:00 p.m. on the day of the meeting, Tuesday 13 March 2007.

Board of Directors of Icelandair Group hf.

Proposals of the Board of Directors of Icelandair Group hf. concerning amendment of the Articles of Association of the Company submitted at the Annual General Meeting of the Company on 13 March 2007

The proposals are as follows:

It is proposed that three new paragraphs, becoming paragraphs 8 - 11, should be added to Article 11, as follows:

"The Board of Directors is authorised to resolve that shareholders should be permitted to participate in the business of shareholders' meeting by electronic means, including by casting their votes without being present at the venue of the meeting. If the Board of Directors resolves to exercise this authorisation, this should be specified in the notice of the meeting and instructions provided concerning such participation.

A shareholder intending to participate electronically shall notify the office of the Company of such intention in writing no later than five days prior to the meeting that has been called. The notification shall be accompanied by questions in writing concerning the agenda of the meeting or submitted documents, if answers are requested at the meeting.

If, in the opinion of the Board, circumstances do not warrant or permit participation by electronic means, shareholders shall nevertheless be invited to post their votes concerning items of business on the agenda of the meeting. The notice of the meeting should provide for the conduct of the voting. A request for such voting shall be delivered to the office of the Company no later than five days prior to announced shareholders' meeting.

In other respects than provided for herein, electronic participation in meetings and/or electronic voting shall be subject to Article 80 of the Companies Act No. 2/1995, cf. Act No. 89/2006."

The following amendment is proposed to paragraph 1 of Article 18:

Instead of paragraph 1 of Article 18 reading as follows:

"The Board of Directors of the Company shall be composed of seven members and two alternate members elected at the Annual General Meeting for a term of one year. The eligibility of members of the Board is subject to statutory law. Elections to the Board shall always be by ballot if the number of nominations exceeds the number of Members to be elected."

Paragraph 1 of Article 18 shall read as follows:

"The Board of Directors of the Company shall be composed of seven members and three alternate members elected at the Annual General Meeting for a term of one year. The eligibility of members of the Board is subject to statutory law. Elections to the Board shall always be by ballot if the number of nominations exceeds the number of Members to be elected."

It is proposed that three new paragraphs, becoming paragraphs 4 - 6, should be added to Article 18, as follows:

"Announcements of candidacy shall include, in addition to the name of the candidate, the candidate's ID number and address, information on principal occupation, other directorships, education, experience and shareholdings in the Company. Notices should also include information on any relations with the Company's principal business partners and competitors and with shareholders holding more than a 10% share in the Company.

The Board of Directors shall review notifications of candidacy and provide the parties in question in a verifiable manner with an opportunity to rectify any defects in the notification within a set deadline. If defects in the notification are not rectified within the set deadline, the Board of Directors of the Company shall rule on the validity of the candidacy. The decision of the Board of Directors may be referred to a shareholders' meeting, which has the final decision as regards the validity of the candidacy.

Information on candidates for seats on the Board of Directors of the Company shall be laid open for inspection by shareholders at the office of the Company no later than two days prior to the shareholders' meeting."

The Board of Directors proposes no further amendments to the Articles of Association of the Company at its next Annual General Meeting.