- Interim financial report for the fourth quarter of 2009 and for 2009

Results in the fourth quarter of 2009
+ Total turnover was ISK 18.2 billion, increasing by 4% in the corresponding
  period of  last year. 
+ EBITDA was negative by ISK 219 million, as compared to a negative result of
  ISK 894 million in the corresponding period of last year. 
+ EBIT was negative by ISK 2.4 billion, as compared to a negative result of ISK
  8.7 billion at the same time last year. Depreciation amounted to ISK 2.7
  billion, down by ISK 5.1 billion from the preceding year. 
+ Financial expenses amounted to ISK 2.9 billion, as compared to ISK 630
  million in the preceding year. 
+ Losses after taxes came to ISK 9.6 billion, as compared to ISK 10.6 billion
  over the corresponding period of last year.

Results in 2009
+ Total turnover was ISK 80.3 billion, increasing by 11% between years.
+ EBITDA was ISK 8.1 billion, as compared to ISK 3.1 billion in the previous
  year. 
+ EBIT was negative by ISK 1.5 billion, as compared to a negative result of ISK
  7.4   billion in the previous year. Depreciation amounted to ISK 6.7 billion,
  down by ISK 3.7 billion from the preceding year. 
+ Financial costs amounted to ISK 6.0 billion, as compared to ISK 1.9 billion
  in the preceding year. 
+ Losses after taxes came to ISK 10.7 billion, as compared to ISK 7.5 billion
  in the year before. 
+ Cash at the end of the year amounted to ISK 1.9 billion, as compared to ISK
  4.1 billion for the at the same time last year. 
+ Total assets amounted to ISK 89.1 billion at year-end 2009 and the equity
  ratio was 16.4% at the end of 2009, as compared to 20.1% at the end of 2008.

CEO Björgólfur Jóhannsson:
“ It is evident that 2009 was a challenging year in international aviation.
However, the operations of Icelandair and Air Iceland were profitable and both
companies are reporting their best annual results in years. In addition,
Lofleidir, Bluebird and Iceland Travel reported a net profit in 2009. I want to
use this opportunity to thank our employees for their dedication and
professionalism which is the driving force of these good results. 

The Group‘s loss of ISK 10.7 billion mainly stem from parent company guarantees
for SmartLynx from 2007, losses from oil hedges of Travel Service and due to
excessive leverage of the parent company dating back to 2006. 

Financial expenses in 2009 amounted to ISK 6 billion, increasing by over ISK 4
billion from 2008. The biggest contributing factor was an ISK 2 billion loss on
forward contracts relating to currency hedging in 2009; conversely, 2008
returned an ISK 1.4 billion profit from forward contracts. Interest expenses
increased by ISK 0.5 billion from 2008, amounting to a total of ISK 4.2 billion
in 2009. 

Icelandair Group's foreign investments have caused great difficulties for the
Group. In 2009, ISK 4.2 billion were expensed as a result of operating losses
and written-off receivables and intangible assets of the Latvian airline
SmartLynx. In addition, expensed items relating to the Czech airline Travel
Service amounted to approximately ISK 1.9 billion. Of this figure, losses on
fuel hedging amounted to ISK one billion, and ISK 900 million resulted from the
sale of a share in the company under its book value. Neither company forms a
part of Icelandair Group's core business, and the board of directors of the
company has therefore resolved to sell both companies. 
The business model has been simplified in significant respects, and the
company's focus will be on services to travellers and on the operation of an
international air route network. The changes will strengthen the position of
Icelandair Group as an operating company in international travel services. The
board of directors of the company has resolved to discontinue the Company‘s
definition of itself as an investment company, as evidenced by the board's
decision to sell the Group's holdings in SmartLynx, Bluebird and Travel
Service. 

The financial restructuring of the company is in its final stages. It has been
clear for a long time that Icelandair Group is excessively leveraged and its
interest burden is too heavy. It is important that the restructuring of the
Company's balance sheet, which was in progress throughout 2009, should be
brought to a conclusion so that the Company's operations can support the
service and payment of its debts. 
It is my belief that following the restructuring, Icelandair Group will be in a
good position to move forward with its operation of an international route
network and universal services to travellers.” 

Presentation meeting on Friday 30 April 2010.
An open presentation for stakeholders will be held on Friday, 30 April, at
Icelandair Group's headquarters, 3d floor, by Hotel Loftleidir at Reykjavik
Airport. Björgólfur Jóhannsson, Icelandair Group CEO, will present the
Company's results and respond to questions, together with the senior
management. The presentation will begin at 16:30. 


For further  information, please contact:
Björgólfur Jóhannsson CEO, Icelandair Group, tel. +354-896-1455
Bogi Nils Bogason, CFO, Icelandair Group, tel. +354-665-8801