- Travel Service will become part of Icelandair Group in Quarter 4, 2007

The operation of the Czech airline Travel Service will become part of
Icelandair Group in Q4 of 2007, but not in Q3 as had been announced. Finalizing
the agreement took longer than planned, but the delay does not affect the
agreement itself. This means that the influence of the inclusion of Travel
Service, on the operation of Icelandair Group in 2007, will be less than
anticipated. The 2007 turnover is now expected to be approximately 62-63
billion ISK. 

The Icelandair Group Q3 EBITDA profits will be below the company's
expectations. In addition to the above mentioned delay the main reasons are
lower revenue in Icelandair scheduled passenger operation due to the strong
currency of the ISK and lower yields. Maintenance cost within the Group is
higher than expected and the currency development affects export from Iceland
and hits the operation of Icelandair Cargo. Bluebird Cargo project status was
also below expectations for a time. 

Icelandair Group will announce its Q3 results on November 13, 2007.