The following proposals have been approved by Icelandair Group's Annual General
Meeting 11 March 2008

1. Proposal regarding dividends (agenda no. 3)
The Board of Directors proposes to the Annual General Meeting that no dividends
in respect of profits for the year 2007 will be paid. 

2. Proposal for the purchase of treasury shares (agenda. 4)
The Icelandair Group hf.'s Board of Directors proposes that the Annual General
Meeting of Icelandair Group hf., held on 11 March 2008, agrees, with reference
to Article 55 of the Act No. 2/1995 on Public Limited Liability Companies, to
authorize the company's Board of Directors to purchase, over the next 18
months, up to 10% of the company's own shares. The shares' purchase price may
be up to 20% above the average sales price of shares on the Iceland Stock
Exchange in the two weeks immediately preceding the purchase. No lower limit is
set on this authorization, either regarding the purchase price or the size of
the share purchased each time. With the approval of this proposal, all previous
authorizations are voided. 

3. Proposal on a Remuneration Policy (Agenda no. 5) 
The Board of Directors of Icelandair Group hf. has confirmed the following
Remuneration Policy with reference to Article 79 A in Act NO. 2/1995, on Public
Limited Liability Companies: 


Icelandair Group hf. Remuneration Policy 

Article 1 - Objective

The objective of this Remuneration Policy is to make employment at Icelandair
Group hf. an attractive option for first-class employees and thereby to secure
for the Company a position in the front ranks of international companies. For
this to be possible the Board of Directors of the Company must be able to offer
competitive salaries and other payments, such as bonuses and options, by
international standards. 

Article 2 - Remuneration Committee

The Remuneration Committee shall be composed of three members elected by the
Board of Directors of the Company from their own number. The Committee will
operate pursuant to specific terms of reference. 

The role of the Remuneration Committee is to provide guidance to the Board of
Directors of the Company and executive management concerning the employment
terms of the Company's key management staff and to provide advice on the
Remuneration Policy. The Committee will also monitor that the remuneration of
key management staff is within the framework of the Remuneration Policy and
report to the Board of Directors annually on this subject in connection with
the Company's Annual General Meeting. The rules of procedure of the Board shall
provide further for the work of the Committee. 

Article 3 - Remuneration of Board members

Members of the Board of Directors shall be paid a monthly remuneration in
accordance with the decision of the Annual General Meeting each year, as
provided in Article 79 of the Companies Act. The Board of Directors will submit
a motion concerning the remuneration for the ensuing year of operation, taking
account of the time spent by members on the work, the responsibility attached
and the results of the Company. 

The remuneration of the Chairman of the Board shall be double the remuneration
of other members of the Board. 

Alternate members shall receive a fixed remuneration for each meeting that they
attend, with the remuneration decided at the Company's Annual General Meeting. 

The Remuneration Committee is permitted to submit to the Board of Directors a
proposal to reward members of the Board through performance-linked payments,
e.g. by means of transfers of shares in the Company or by means of cash
payments. Such rewards are subject to the condition of significantly favorable
results in the operation of the Company during the financial year and, at the
same time, significant increases in the price of shares in the Company. 

No severance agreements are permitted with members of the Board. 

Article 4 - Remuneration of Chief Executive Officer

A written employment contract shall be concluded with the Chief Executive
Officer for a term which should normally not exceed five years at a time. The
employment contract with the CEO may be renewed while it is still in effect. An
agreement may be negotiated with the CEO on an initial payment on his/her
appointment to the Company. 

The amount of the basic salary and other payments to the CEO shall take account
of the CEO's education, experience and former employment and shall always be
competitive in the international market. Other terms of employment shall be as
customary at comparable companies, e.g. as regards contributions to a pension
fund, vacation, use of vehicle and notice period. 

The determination of the notice period in the employment contract may include
special provisions concerning length of the notice period, taking into account
the employment term of the CEO, up to a maximum of 36 months. Furthermore, the
employment contract shall provide for the conditions for termination of the
CEO's employment. 

The basic salary of the CEO shall be reviewed annually, taking into account the
assessment by the Remuneration Committee of the CEO's performance, general
remuneration terms in comparable companies and the Company's results. 

In the conclusion of an employment contract with the CEO it should be taken
into account that there will be no payments at the end of employment other than
those provided for in the employment contract. However, it is permitted under
special conditions, at the discretion of the Remuneration Committee, to
conclude a separate severance agreement at the end of the CEO's employment. 

Article 5 Remuneration of vice-presidents

The CEO will appoint the vice-presidents of the Company in consultation with
the Board Directors of the Company. The determination of the remuneration of
the vice-presidents shall be subject to the same guidelines as those outlined
in Article 4. 

Article 6 - Bonuses

Key management staff of the Company may be paid bonuses in the form of cash or
shares in the Company on the basis of plans decided by the Board of Directors
of the Company. Bonuses shall be based on the performance of the employee in
question, the results of the Company, important milestones in the Company's
operation and business activities, including the attainment of established
objectives. Bonuses may only be paid to persons who are actually working for
the Company at the time of payment of the bonus. 

Article 7 - Options

The Remuneration Committee may submit a proposal to the Board of Directors of
the Company concerning stock options for key management staff in excess of
options negotiated in the respective managers' employment contracts. 

In deciding whether to grant stock options to key managers account shall be
taken of the position, responsibility, performance and future prospects of the
manager in question within the Company. Furthermore, account shall be taken of
similar agreements granted to the manager in question, whether or not the
options have been exercised. A stock option is exercisable only when the party
that has entered into such an agreement is working for the Company at the time
that the stock option becomes effective. 

If the Board of Directors decides to grant stock options to company managers a
plan for such stock options shall be submitted to the Annual General Meeting of
the Company for approval or rejection. The Board of Directors shall provide at
the meeting an account of the cost that may accrue to the Company from the
stock option plan, if approved. 

Furthermore, the Company shall be permitted, directly or indirectly, to grant
loans or provide guarantees in connection with the purchase by key managers of
the Company or related companies of shares in the Company, whether such
acquisitions are connected with the above stock option plans or other
acquisitions by key managers of shares in the Company. 

Article 8 - Other employees

In the determination of the wage terms of other employees, the vice-presidents
of individual divisions shall take account of the above rules, as applicable. 

Article 9 - Disclosure requirements

At Annual General Meetings the Board of Directors shall provide an account of
the employment terms of the CEO, vice-presidents and members of the Board of
Directors. Information shall be provided on the total amount of paid
remuneration over the year, payments from other companies within the same
Group, the amount of bonuses and stock options, other payments connected with
shares in the Company, severance payments, if any, and the total amount of
other payments. 

This Remuneration Policy shall be published on the Company's website. 

Article 10 - Approval of Remuneration Policy etc.

The Company's Remuneration Policy shall be submitted for deliberation at the
Annual General Meeting and submitted to review each year and placed before the
Annual General Meeting for approval or rejection. 

The Remuneration Policy is binding for the Board of Directors of the Company as
regards its provisions on stock option contracts and any contracts or payments
that follow the trends of the price of stocks in the Company, as provided in
Article 79 (a) of the Companies Act No. 2/1995. In other respects, the
Remuneration Policy serves as a guideline for the Company and its Board of
Directors. The Board of Directors shall enter into their records any
significant deviations from the Remuneration Policy and the deviations shall be
supported by clear reasoning. An account must be given of such deviations at
the following Annual General Meeting of the Company. 

Explanatory notes with the Icelandair Group hf. Remuneration Policy

Act No. 89/2006 amended the Companies Act with the addition of Article 79(a).
The Article imposes the obligation on the Board of Directors of Icelandair
Group to submit the Company's Remuneration Policy to the Annual General Meeting
of the Company for approval or rejection. The Remuneration Policy must provide
for the salaries and other payments to the Chief Executive Officer and other
key managers of the Company, as well as its directors. The Act stipulates that
the Remuneration Policy should disclose all principal aspects relating to
managers and directors, as well as the policy of the Company with regard to
contracts with managers and directors. Furthermore, the policy must reveal
whether, and under what circumstances and within what framework, it is
permitted to pay or remunerate managers and board members in addition to their
basic salaries, e.g. in the form of transfers of shares, performance-linked
payments, share certificates, call and put options, pre-emptive rights and
other types of payments which are linked to shares in the Company, movements in
the price of shares, loan agreements, pension agreements and severance
agreements 

The amendment was made in line with Commission Recommendation No 2004/913/EC of
14 December 2004 fostering an appropriate regime for the remuneration of
directors of listed companies. 

The Board of Directors of Icelandair Group hf has the objective, in submitting
this Remuneration Policy now before the Annual General Meeting of the Company,
of establishing for the Company a reasonable Remuneration Policy that will make
it possible for the Company to attract directors of the highest quality and
thereby secure the Company's international competitive position. 

4. Proposals on remuneration of the Board of Directors for the year 2008  

It is proposed that Board members receive ISK 200,000 per month and that the
Executive Chairman receives ISK 400,000 per month and alternate Board members
receive ISK 100,000 for each meeting attended. 

5. Election of auditors (agenda no. 8)

The Board of Directors of Icelandair Group hf. proposes that the auditors KPMG
hf. be the company's auditors. 

6. Election of board members


Board Members:

Ásgeir Baldurs, kt.171172-5439, Lómasölum 13, Kópavogi
Einar Sveinsson, kt. 030448-2789, Bakkaflöt 10, Garðabæ.
Finnur Reyr Stefánsson, kt: 141069-3659, Brekkuási 11,  Garðabæ
Gunnlaugur M. Sigmundsson, kt. 300648-3719, Þverárseli 20, Reykjavík.
Ómar Benediktsson, kt. 221059-4689, Ægisíðu 58, Reykjavík.

Alternate Board Members:

Martha Eiríksdóttir, kt. 251257-5159, Vesturbrún 33, Reykjavík.
Jón Benediktsson, kt. 161064-3359, Hæðarbyggð 23, Garðabæ
Sigurður Atli Jónsson, kt.040268-5299, Ystaseli 19, Reykjavík