- Decision of the Competition Appeals Committee in case No. 4/2007


Icelandair says the decision of the Competition Appeals Committee constitutes
serious criticism of the decision of the Competition Authority 

Icelandair disagrees with the conclusion of the Competition Appeals Committee,
but is satisfied with the partial victory that the fine imposed earlier by the
Competition Authority was reduced by 30%, to ISK 130 million. Furthermore, the
decision of the Competition Appeals Committee is based on different premises
than those used by the Competition Authority, and this is seen by Icelandair as
reflecting serious criticism of the decision of the Competition Authority.
Icelandair is now considering whether to refer the decision of the Competition
Appeals Committee to the courts of law. 

In the opinion of Icelandair, the company complied with competition law and the
ruling of the Competition Appeals Committee of 2003, which confirmed
Icelandair's right to advertise and sell its Internet discount fares,
Netsmellir in the manner that this was done. This decision provided Icelandair
with guidance, which the company observed in its pricing in 2004. Decisions to
the contrary now, three years later, are unacceptable. 

Icelandair is the only Icelandic airline operator engaging in scheduled
international flights between Iceland and other countries. The competition in
passenger flights to and from Iceland is fierce, however, and Icelandair
reserves its right to participate actively in this competition for the benefit
of consumers - in line with the objectives of the Competition Act concerning
active competition. Apart from Icelandair, the current participants in the
market are the Swiss airline Hello, the British airline Astreus and the Danish
airline Sterling, flying under the name of Iceland Express, the Scandinavian
airline SAS and the British airline British Airways. In addition, numerous
foreign airlines operate chartered flights from Iceland for domestic travel
agencies.