Icelandair has reported that 2018 was a “difficult operating year” as it posted a loss after taxes of $55.6 million compared to a profit of $37.5 million in 2017.
The airline said that the annual financial result was due to strong competition, low and frequently irrational fares and significant fuel price increases.
Total income was $1,511 million, up by seven per cent year-on-year in 2018 and EBITDA was $76.5 million, as compared to $170.1 million in 2017.
The carrier operates a route network to 48 cities in 16 countries on both side of the Atlantic out of its hub at Keflavik International Airport, near to the Iceland capital Reykjavik.
Icelandair president and chief executive officer, Bogi Nils Bogason said: “2018 was a difficult business year. Results fell short of our projections at the beginning of the year, which was characterised by strong competition, low and frequently irrational fares and significant fuel price increases.
“At the same time, changes in our sales and marketing operations and Route Network had a negative impact on our performance.
“Our mission is clear: to improve the Company’s profitability and strengthen our operations for the future. Changes in the Company’s organisational structure have already been made to reflect our emphasis on our core operation, which is aviation.
“We are currently taking a number of measures, both on the revenue and expense side, which should result in improved operations in 2019. These measures include modifications in capacity to achieve a better balance in the Route Network between Europe and N-America, which will facilitate control and maximise revenue.
“We have also placed increased emphasis on ancillary revenue and on strengthening our sales and marketing activities, as well as an implementation of a new revenue control system is in its final stages.
“Furthermore, in the spring 2019, a new connection bank will be added alongside the current connection bank, which will improve resource utilisation as well as increase capacity and revenue. In addition, the Group’s domestic flight operations are currently under review.
“It is clear that we are faced with uncertainty in our operating environment and our competitive environment is changing. However, our Company benefits from its strong foundations as well as our talented and capable people.
“The financial position of the Company is strong, and I am convinced that we are well positioned to take on the challenges and seize the opportunities that lie ahead.”