This article first appeared on GuruFocus .
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Record Revenue:Achieved record passenger revenue of $1.5 billion.
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Passenger Growth:Transported over 5 million passengers, a company record.
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Load Factor:Reached a record high of 84.3% in Q4.
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Operating Income:Increased by 17% year-on-year to almost $407 million in Q4.
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Operating Expenses:Rose 15% to $392 million in Q4.
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Net Loss:Improved by $10 million, with EPI for the full year at a negative $17 million.
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Equity Ratio:Ended the year at 15%.
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Liquidity:Closed the year with $458 million, an increase of over $400 million year-on-year.
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Unit Revenue:Increased by 2% for the full year.
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Unit Cost:Increased by 2% for the full year.
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Fuel Costs:Increased by 13% in Q4.
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Cash Flow from Operations:$305 million, $106 million higher than last year.
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Equity:Improved by $17 million to $286 million for the year.
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Passenger Growth in Q4:1.2 million passengers, a 13% increase year-on-year.
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Yield Improvement:Improved by 4% in Q4.
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CO2 Emissions:Achieved a 3% reduction per operating ton kilometer.
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Salary Costs:Increased by 21% year-on-year in Q4.
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Transformation Program Impact:Delivered over $30 million in cost savings.
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Release Date: February 06, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Icelandair Group hf ( OISE:ICEAIR ) generated record revenue and transported over 5 million passengers for the first time in company history.
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The company achieved a record high load factor and ranked among Europe's most punctual airlines, enhancing customer experience.
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Operational efficiencies were improved, with an 8% capacity growth achieved using 2% fewer full-time equivalents (FTEs).
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The transformation journey initiatives are expected to deliver over $100 million in annual impact when fully implemented.
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The company closed the year with a strong liquidity position of $458 million, marking an increase of over $400 million from the previous year.
Negative Points
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Full-year results did not meet initial expectations, with an EPI ending at a negative $17 million.
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Geopolitical developments led to a $44 million increase in operating costs due to the depreciation of the US dollar.
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Salary increases in Iceland have outpaced those in other regions, posing challenges for export-driven service industries.
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Carbon emission costs more than doubled, amounting to $43 million, impacting the bottom line.
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The weakening of the dollar added approximately $44 million to the cost base, affecting profitability.
Q & A Highlights
Q: Your financial guidance remains broad and doesn't explicitly reference a return to profitability. Should we interpret this as limited confidence in achieving a positive EBIT this year, or is profitability not something you're ready to guide on yet? Are you still aiming at reaching an 8% target in the near future? A: (Ivar Kristinsson, CFO) Given the current operating environment, it's not prudent to provide a narrow EBIT guidance range. This is a low-margin business, and meaningful guidance would need to be broad. We plan to make a profit this year, improving profitability year on year. (Bogi Bogason, CEO) We are still aiming to reach an 8% EBIT on average through the cycle, and all our long-term plans are directed towards that goal.
Q: You're negotiating new agreements with pilots, cabin crew, and mechanics. How large is your wage gap versus European peers, and what specific changes are you targeting? When do you expect agreements to be in place, and what is the downside if negotiations are delayed? A: (Bogi Bogason, CEO) The salary increases in Iceland have been higher than in neighboring countries, posing challenges for export service industries. We aim for more flexibility and competitiveness. It's hard to specify an exact pay gap as no two airlines are the same, but we need to be more competitive. The focus of negotiations is on flexibility and competitiveness.
Q: Carbon emission costs have increased sharply. Do you feel there is sufficient understanding at the government level of how this impacts airlines like Icelandair, and do you expect any policy relief soon? A: (Bogi Bogason, CEO) There is understanding within the government and politicians, but urgency is needed. The government is working in Brussels for a long-term solution. It's crucial for the whole economy that the government finds a long-term solution, and they are aware of what needs to be done.
Q: Have recent changes in the environment altered your approach to hedging currency risk going forward? A: (Ivar Kristinsson, CFO) Our hedging policy on liquidity risk is clear. We hedge 40 to 80% of the net exposure for the coming 12 months. We continue to follow this policy, selling foreign currency and buying krona.
Q: In 2025, visitors from China were the fastest-growing group. Do you have partnership agreements or code-sharing in place to tap into this market? A: (Bogi Bogason, CEO) We have strengthened our partnership portfolio with new agreements, such as with Turkish Airlines, enhancing our flow to and from Asia and the Middle East. We continue to work with airlines on a partnership basis and see opportunities in Asia.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
