Financial effects of Boeing 737-MAX Suspension
As previously announced, the suspension of Icelandair’s Boeing 737-MAX aircraft has had negative financial effects on the Company. The estimated impact on EBIT quantified to date as of 1 August 2019 amounted to USD 140 million and has increased during recent months since the suspension is still ongoing. The Company has also previously announced that it has started discussions with Boeing regarding compensation for all the financial loss resulting from the suspension.
Icelandair has reached an interim agreement with Boeing regarding compensation which covers a fraction of the Company’s total loss due to the suspension of the Boeing 737-MAX aircraft. The details of the agreement are confidential. The estimated impact of the suspension on EBIT quantified to date is around USD 135 million taking into account the agreement with Boeing. Icelandair Group will continue its discussions with Boeing regarding compensation due to the financial effects of the Boeing 737-MAX suspension. Taking the estimated impact quantified to date of the MAX suspension into account the EBIT guidance for the year is unchanged, that is negative of USD 70-90 million.